What is Escrow?
Once your offer on a new home or other property is accepted by the Seller, your transaction is placed “into escrow” – but what exactly does that mean?
Escrow: The deposit of funds, a deed, and other items to a neutral third party for the purpose of completing a real estate purchase.
Why Do I Need It?
It facilitates the real estate transaction by managing the disbursement of funds and documents.
It provides assurance that no funds or property will change hands until all instructions for the transaction have been completed.
Who Are The Key Players?
In many states, the escrow officer is know as the “closer.” In other states, licensed attorneys are required to handle escrows, but often work with a closer from a title company to do some of the processing.
The Buyer, Seller, and Lender will give instructions to the escrow officer to close the transaction.
The Real Estate Professional provides the escrow officer the necessary information to create the escrow instructions.
The Escrow Officer is responsible for: adhering to the instructions set forth by the principal members of the transaction, processing the escrow in a quick and efficient manner, and closing the escrow when all terms have been met.
These Terms often include: completing a home inspection, purchasing homeowners insurance, completing negotiated repairs, paying all authorized bills, fees, and charges, disbursing funds in accordance with the instructions, and providing the closing or settlement statement.
While a real estate professional may recommend an escrow company or officer, the buyer and seller have the right to choose their service provider.
What Is My Role?
Whether you are buying or selling, you’ll play a major role in the escrow process…
- Read and understand the escrow instructions, agreements, or terms and conditions
- Respond promptly to any correspondence regarding your transaction
- Direct questions regarding your loan to your lender
- Carefully review the closing statement
What’s In The Closing Statement?
The closing statement will include information such as:
- Purchase price
- Funds that will be deposited or credited to your account
- Costs of all services
- Payoffs on existing encumbrances or liens
- Funds required to close the transaction
Thoroughly examine all closing documents. Safely store your closing statement and other escrow documents for tax purposes.
Are you ready to Search For Homes or discover What’s My Home Worth? If so, contact us today for your free consultation!
844-400-6040 or TucsonPowerGroup@gmail.com
Tucson Power Group can help you with a residential sale or purchase anywhere in Southern Arizona. If you are in another area or state, we have a network of quality agents. Call us today, and we can help you find a competent agent in your town.
More posts in the Real Estate 101 Series: ABCs of Real Estate