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

 DFW Skyline Realty can walk you through closing - (682) 667-5556
Let's talk about "escrow". An escrow holder is hired to assure your place closes on time and the money exchanging part of closing goes smoothly. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. PayPal is a good way to picture an escrow company.

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

Escrow companies collect the following pieces of paperwork:

  • 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

Closing on the house happens when all of the procedures of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then transferred to you as new homeowner and appropriate title insurance is issued as noted in the escrow instructions.

At the close of escrow, fees are paid in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Perform a title research
  • Meet lender's standards as specified in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been finished
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Give advice - the escrow company must stay at a fair, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title research
  • Meet the bank's standards as written in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse payments and finish instructions
  • Tell you what's best - the escrow holder has to remain an impartial, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. 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're familiar with the escrow process, you can be a confident buyer.

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