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

 Berkshire Hathaway HomeServices - Anderson Properties can walk you through closing - (405) 823-4928
First, a little about "escrow". To finish the sale of a property, a neutral, third party (the escrow agent) is engaged to assure the transaction will close properly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.

The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are met in preparation of the sale being finished.

These are the legal forms that escrow companies usually look for:

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

You're ready to close when each step of the finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the property and the title insurance gets dispersed as stated in the escrow instructions.

At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your real estate professional, I'll inform you of the acceptable way of paying.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Request title search
  • Meet the bank's guidelines as noted in the escrow agreement
  • Intake funds from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finalize instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow holder stays at an impartial, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Request title inquiry
  • Comply with lender's standards as specified in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse payments and finalize instructions
  • Give advice - the escrow company must stay at a fair, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

This is a simple outline of the escrow process. Your particular process may be different based on your bank and your escrow holder.

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