The process of buying real estate for the first time can be intimidating. Let me help you. E-mail me at monalisa@topproducer.com .

First-Time Home Buying: How To Close on a Place

 Reliable Realty Group can walk you through closing - (401) 723-3300
First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is used to assure your property closes on time and the process goes smoothly. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an online transaction, PayPal is the secure third party that obtains the buyer's cash, and then disburses the payment to the seller.

Tying up any loose ends like taking in funds, finishing forms, getting the documents for loans and liens, and assuring you get a spotless title to the house before your purchase gets finalized are all parts of closing in which an escrow agent is useful.

These are the documents that escrow agents usually look to collect:

  • Title insurance policies
  • Terms of sale and any seller-assisted financing
  • Requests for payment for various services to be paid out of escrow funds
  • Loan documents
  • Tax statements
  • Fire and other insurance policies

Upon finishing of all instructions of the escrow, closing can take place. All debts and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title goes to you and title insurance begins per the steps of your particular escrow agreement.

At the close of escrow, fees are paid in an acceptable form to the escrow. As your agent, I'll let you know what is an acceptable way of paying.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Request title search
  • Meet lender's standards as written in the escrow agreement
  • Receive payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse funds and finish instructions

The Escrow Holder Won't:

  • Advise you - the escrow holder has to remain an impartial, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Petition title research
  • Comply with lender's guidelines as outlined in the escrow agreement
  • Receive funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse monies and finish instructions
  • Tell you what's best - the escrow holder must stay at a fair, third-party status
  • Dispense opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay on-going expenses while there is a loan on the house. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

Once you have the rules of the escrow process down, you can be a informed buyer.

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