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FAQs about
closing
What is an Escrow?
Escrow is the deposit of documents and funds with a neutral
third party with specific instructions as to how they should be disbursed. Escrow acts as the clearing house for the exchange and
distribution of those documents and funds in connection with transfer or
financing of real property. I will attend the closing or escrow settlement with you to
verify the transaction closes as agreed. The escrow officer, an employee of the title insurance company
will, acting as a neutral 3rd party, explain the documents and have you sign
them. The officer will then assure completion of the transaction by delivering
to the lender for verification and document recheck and delivering to the county
for recording of your deed.
Why is escrow important to the
parties of a transaction?
Escrow, or the services of a qualified escrow agent, assures
all interested parties that the rules and regulations governing real property
transfers will be strictly observed by a neutral third party with an objective
interest in completing the transaction. An escrow agent represents neither the seller nor the buyer.
The escrow agent can act only on each party's behalf according to their written
instructions.
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What escrow services does the title company provide?
The basic definition of an escrow agent's responsibility is to
accept and hold a deed from the seller in exchange for funds from the buyer. The
escrow agent will concurrently, when all mutually agreed terms have been
satisfied, release the funds to the seller and deed to the new buyer. In most sale transactions, this “simple” process requires
the escrow agent to perform the following:
- Order a title report on the subject property and obtain all
the necessary information to clear all title defects and satisfy existing
liens and encumbrances against the property or the principals involved in
the sale;
- Work with the buyer's lender to insure instructions from
the seller, buyer and lender are coordinated;
- Prepare many of the documents necessary for the transaction
and review all others to make certain they conform to the parties' demands;
- Figure tax and interest pro-rations and prepare closing
statements for both buyer and seller;
- Arrange closing appointments for all parties to sign the
necessary documents;
- After taking final signatures, the escrow agent has
responsibility to complete the transaction by checking all documents for
completeness, compliance and accuracy;
- Return copies of all loan documents to the lender for
approval to record;
- Record all necessary documents in the county where the
property is located. This is when the transaction is closed.
- Disburse all funds out of the escrow account according to
the signed, written instructions. (These funds could include the seller's
net proceeds, the Broker's real estate commission, and other payments
required for loan approval or to satisfy other terms of the agreement.)
- Prepare and distribute final closing statements to all
interested parties.
<selling
your home> or <buying a
home>
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Mike Burns, CRS, GRI, REALTOR®
RE/MAX Realty Associates LLC
www.StevensPoint Realtor.com
www.StevensPointHomes.net
www.StevensPointMLS.com
www.Homepointers.net
©
2000-09
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All About Escrow and Real Estate Closings : Or How to Buy the
Brooklyn Bridge and Have the Last Laugh!
Mortgages For
Dummies