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What To Expect When You're Closing in
Southern Pines, North Carolina
First, a little about "escrow". An escrow holder is used to assure your place closes on time and the money exchanging part of closing goes smoothly.
When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow.
PayPal is a simple way to think of an escrow company.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finished. This includes receiving payments and documents, completing required forms, and seeking out the release documents for any loans or liens that have been paid with the transaction, assuring you have a free title to your house before the asking price is fully paid.
These are the documents that escrow holders usually compile:
- 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 property takes place when all of the procedures of the escrow are finished.
At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out.
You'll then get the title to the house and the title insurance gets dispersed as agreed upon in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow.
You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow instructions
- Perform a title research
- Meet the bank's requirements as specified in the escrow agreement
- Accept payments from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer are met
- Disburse payments and finish instructions
- Advise you - the escrow company stays a neutral, third-party status
- Give insight 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 have the ABCs of the escrow process down, you can be a more assured buyer.
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