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

Escrow
To close the sale of a property, a neutral, third party (the escrow company) is engaged to assure the transaction will close appropriately and on time. A Prescott home is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties when the exchange of money takes place. For example, in an online transaction, PayPal is the secure third party that holds the buyer's payment, and then disburses the funds to the seller.

The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are reached prior to the sale being completed.

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These are the legal documents that escrow holders usually look to collect: Fire and other insurance policies 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

Upon finishing of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, Prescott real estate commissions). You'll then get the title to the property and the title insurance gets dispersed as agreed upon in the escrow instructions.

The escrow company receives a payment when the closing is complete. I'll keep you informed on the what comes next.

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow instructions Request title research Meet lender's standards as specified in the escrow agreement Intake funds from the buyer Prorate tax, interest, insurance and other fees according to guidelines Record deeds and other documents as instructed Obtain title insurance policy Close escrow when all instructions of seller and buyer are complete Disburse funds and finish instructions		Give advice - the escrow agent has to remain an impartial, third-party status Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for rolling expenses while there is a loan on the house. Usually, the Prescott home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

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