What To Expect When You're Closing in San Diego
Escrow: An escrow company is hired to assure your place closes on time and the transaction goes smoothly.
A house is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties when the exchange of money takes place.
For example, in an online transaction, PayPal is the reliable third party that holds the buyer's cash, and then hands over the payment to the seller.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being finished. This includes securing funds and records, filling out required forms, and obtaining the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your house before the agreed upon price is fully paid.
Escrow companies compile the following documents:
- 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
You're ready to close when all steps are done in escrow process.
At this time, all payments and dues 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 issued as outlined in the escrow instructions.
At the close of escrow, payments of funds are made in an acceptable form to the escrow.
You'll know when it's time to submit the form of payment.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Assemble escrow instructions
- Petition title inquiry
- Comply with lender's requirements as specified in the escrow agreement
- Accept funds from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse funds and finish instructions
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- Give advice - the escrow holder has to remain an impartial, third-party status
- Dispense opinions about the outcome of your taxes
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Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
This is a simple outline of the escrow process. Your individual process could vary depending on your lender and your escrow agent.