ESCROW? What is it?
A third party holds onto your escrow funds and documents involved in your home sale, when the time come it is distributed among the parties accordingly. The escrow period begins when a seller accepts a buyer's offer, and ends at the closing table. Certain companies will perform excrow in office rather than hiring a 3rd party.
You will be able to move faster if you earnest deposit money is an an easily accessible account when you begin home shopping.
There's a lot of money involved in purchasing a home its not like buying a pair of running shoes. The sellers and buyers don not exchange money and documents directly with one another. Thats what the escrow account is for.
Buyers want to be sure that all their contingencies are met (such as: inspection, title report, secured mortgage, etc.) before the sellers cash any checks. Escrow money just ensures their accountability to continue with the transaction. Sellers want to make sure they have the funds in hand before they hand over the deed.
An escrow account opens up when potential buyers write an earnest money check that accompanies their offer to show the sellers that they’re serious about buying the home. Some real estate company's handle the escrow/closings at their offices with the help of a closing manager.
A settlement/closing agent or escrow officer, does the following:
• Holds documents and funds.
• Facilitates and processes the flow of funds and documents.
• Keeps all parties informed on how the transaction is going.
• If the lender has requirements they help clear them up.
• If necessary the will help secure title insurance.
• Gets approval of documents and reports from all parties.
• make adjustments and prorates insurance, taxes, rents, fees, etc on closing sheets.
• Takes the deed and loan documents to be recorded at the end of the transaction.
• Holds onto money owed and money deposited and keeps record of it.
When all the tasks are finished, the escrow closes. Funds are paid out accordingly, documents are recorded at the court house and copies of forms are given to the parties involved.
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