How Escrow Works
To finalize the sale of the home a neutral, third party (the escrow holder, a.k.a. escrow agent) is engaged to assure the transaction will close properly and on time. The escrow holder insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you clear title to your property before the purchase price is fully paid.
Documentation Includes
- Seller's Existing Loan Information
- HOA Company/ Management Company
- Statement of Information
- Fire and other insurance policies
- Title Insurance desired
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Termite Company
- Zone Disclosure Company
- Home Warranty Company
- Purchase Contract
- Loan Documents
The Escrow Holder Will:
- Prepare escrow instructions
- Request title search
- Comply with lender's requirements as specified in the escrow agreement
- Receive funds from the buyer
- Prorate insurance, tax, interest and other payments according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse funds and finalize instructions
The Escrow Holder Won't:
- Give advice - the escrow holder must maintain neutral, third-party status
- Offer opinions about tax implications
- Give advice on Shortsales - will be referred to an attorney