Purchasing real estate for the first time can be confusing. I can help. E-mail me at frank@qmetrorealtors.com .

Escrow 101

 Qmetro Realtors Inc can walk you through closing - 505.615.0436
Escrow: To finish the sale of a property, a neutral, third party (the escrow agent) is employed to assure the transaction will close perfectly and on time. Escrow agents hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in an online transaction, PayPal is the secure third party that holds the buyer's funds, and then hands over the money to the seller.

Clearing the final hurdles like obtaining funds, finishing forms, obtaining the documents for loans and liens, and assuring you get a clear title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow holder is useful.

These are the records that escrow companies usually look for:

  • 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

You're ready to close when all steps are done in escrow process. All payments owed and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then get the title to the property and the title insurance gets issued as noted in the escrow instructions.

At the close of escrow, 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:

  • Prepare escrow instructions
  • Request title inquiry
  • 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 guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse monies and finish instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow company must maintain a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Perform a title search
  • Comply with the bank's guidelines as noted in the escrow agreement
  • Receive funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse funds and finalize instructions
  • Offer 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 used to make payments for rolling fees while there is a loan on the house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

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

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