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What To Expect When You're Closing in Austin, Texas
First, a little about "escrow". To finalize the sale of a house, a neutral, third party (the escrow holder) is brought into the picture to assure the transaction will close properly and on time.
A house is said to be in escrow when in the closing transaction, money is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place.
PayPal is a good way to picture an escrow company.
The escrow holder makes sure that the terms and conditions of the agreement between the sellers and the buyers are completed in preparation of the sale being completed.
Escrow holders compile the following documents:
- 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
- Terms of sale and any seller-assisted financing
Closing on the property takes place when all of the procedures of the escrow are complete.
All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions).
Title to the house is then transferred to you as new homeowner and correct title insurance is issued as outlined in the escrow instructions.
At the close of escrow, fees are paid in an acceptable form to the escrow.
I'll keep you updated on the procedure.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Perform a title inquiry
- Comply with the bank's requirements as written in the escrow agreement
- Intake payments from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse monies and finish instructions
- Offer advice - the escrow agent stays at an impartial, third-party status
- Offer opinions about tax implications
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your 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 easy to understand guide about the escrow process. Your individual plan will be unique depending on your bank and your escrow holder.