Don’t let real estate industry jargon scare you from becoming a homeowner. We can help you work your way through the process. Contact us and we’ll make sure you’re an empowered buyer.
The House is Almost Yours
Let’s talk about “escrow”. An escrow holder is brought on to assure your home closes on time and the money exchanging part of closing goes smoothly. When payment is 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.
Typically in New York State and the Glens Falls area the escrow is held by the closing attorney in their IOLA account. All money from the mortgage company for the closing is wired into the IOLA account and then checks are written by the attorney’s office for disbursement at closing. Your original “good faith” deposit on the purchase is held by the listing real estate broker in their escrow account. The fee the listing broker receives for the sale at the closing is reduced by the amount in the broker’s escrow account. It is further reduced by the fee that the buying broker receives.
Escrow holders want to acquire the following pieces of paperwork:
- Tax statements
- 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
Upon finishing of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You’ll then obtain the title to the home and the title insurance gets issued as noted in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. We’ll keep you up-to-date on the next steps.
The Escrow Holder Will:
The Escrow Holder Won’t:
Mortgage Escrow Account
A Mortgage Escrow Account is established to make payments for rolling fees while there is a loan on the house. 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.
This is a simple outline of the escrow process. Your particular methods may be slightly different depending on your bank and your escrow agent.