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Steps to Closing on a House

 Greater R.I. Properties, LLC can walk you through closing - 401-932-9005
Let's talk about "escrow". To finish the sale of a place, a neutral, third party (the escrow agent) is employed to assure the transaction will close perfectly and on time. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. An everyday way to understand what an escrow company does is to compare it to PayPal for online purchases.

The escrow company is careful to assure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finished. This includes securing funds and documents, finishing required forms, and obtaining the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a free title to your place before the final price is fully paid.

These are the legal documents that escrow holders usually look to collect:

  • 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
  • Fire and other insurance policies
  • Title insurance policies

Upon completion of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the house and the title insurance gets issued as stated in the escrow instructions.

At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your REALTOR, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Petition title search
  • Meet lender's guidelines as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse monies and finish instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow company has to remain an impartial, third-party status
  • Offer opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Petition title research
  • Comply with the bank's requirements as noted in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse funds and finalize instructions
  • Offer advice - the escrow agent stays a neutral, third-party status
  • Dispense opinions 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.

Now you know more about being in escrow. And, you can be a more confident home buyer and future homeowner.