The escrow process, often referred to as the closing process, happens in between the time the seller reviews and accepts the purchase agreement and the period in which the buyer will
receive his or her keys to their new home. While your real-estate agent will be your right-hand man or woman during this whole process, it is important that you, as a homeowner, understand the escrow process. Here’s what you need to know.
Understanding the Escrow Process
Seek out a Title Company
Title companies are there to make sure that the title you received at the time of your back-and-forth negotiations are amid of any discrepancies. This consists of written clauses stating you are in debt to another person or entity, forgeries, frauds or any other issues that must be cleared before the deal can be finalized. After the title insurance company reasons that there are no problems with the title, they deliver a title insurance policy to protect both the buyer and creditor from future claims and problems that may arise throughout and on the property.
Opening an Escrow Account or Settlement
Once you and the current homeowner have reached a mutually signed agreement, your real- estate agent will collect your good check and deposit that into a newly created escrow account specifically tailored and narrowed down to the escrow company labeled in the purchase agreement. Escrow companies are normally third-party extras that make sure all the necessary paperwork is dated and signed and that all the money from both parties is collected and deposited into a trusted account. Some homeowners may call upon their reliable attorneys for this process, rather than an escrow company. For this, it is called a settlement instead of an escrow.
Waiting for a Bank Appraisal
After the escrow account is created, the original homebuyer will typically pay for a bank appraisal of their property. This is needed to save the home in case it has to be foreclosed on and if the assessment comes in lower than the offered price, the bank will not give you financing unless you are willing to pay for the different upfront. If you are unhappy with the bank’s evaluation, it is suggested you receive second opinions and, if worst comes to worst, you will be able to cancel the purchase agreement.
Secure Financing and Review the Agreement
You should have already received an approved mortgage at the time of purchase, and a statement outlining the details of your loan, interest rate and closing costs and other associated fees with your purchase. You should also receive written alerts of any problems the property has encountered over the past several years. After all of this, some inspections to receive and guidelines and stacks of paperwork to sign and date, you have finally received complete ownership of your new home and are ready to start your new life.
How Can We Further Help You?
At Residential Title & Escrow, we bring peace of mind to the settlement table. If you are searching for a title company to help you through the closing process, contact us today! You can also fill out our simple online title request form and one of our knowledgeable representatives will get in touch with you promptly. Be sure to follow us on Facebook, Twitter, Pinterest, andGoogle+ to stay up to date on news, and upcoming events as well as staff and client spotlights!