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What To Expect When You're Closing in Rhinelander
Let's talk about "escrow". When you're closing on your new home, a neutral, third party (known as the escrow holder or the escrow agent) is used to make sure the transaction will close correctly and in a timely manner. A property is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. For example, in an Internet auction, PayPal is the neutral third party that holds the buyer's payment, and then hands over the payment to the seller.
The escrow agent makes sure that the terms and conditions of the agreement between the two parties are completed prior to the sale being completed.
These are the documents that escrow agents usually look to collect:
- 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
- Title insurance policies
Upon finishing of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. The house's title goes to you and title insurance is issued per the policies of your particular escrow agreement.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Prepare escrow instructions
- Perform a title research
- Comply with lender's guidelines as specified in the escrow agreement
- Intake funds from the buyer
- Prorate tax, interest, insurance and other fees 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 finished
- Disburse payments and finalize instructions
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- Give advice - the escrow agent stays at an impartial, third-party status
- Give insight about future tax estimations
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Mortgage Escrow Account
A Mortgage Escrow Account is used to pay recurring fees while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Once you have the ABCs of the escrow process down, you can be a better buyer.