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Closing the Sale in Bay Shore, New York
Let's talk about "escrow". To finalize the sale of a house, a neutral, third party (the escrow agent) is brought into the picture to assure the transaction will close correctly and on time. A house is said to be in escrow when in the closing process, funds is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. PayPal is a simple way to think of an escrow company.
The escrow agent insures that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being finalized. This includes securing monies and paperwork, signing required forms, and getting the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clean title to your home before the purchase price is fully paid.
These are the legal forms that escrow companies usually compile:
- 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
- Tax statements
You're ready to close when every step is done in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. Title to the house is then transferred to you as new homeowner and appropriate title insurance is issued as noted in the escrow instructions.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your real estate agents, we'll inform you of the acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Petition title search
- Comply with lender's guidelines as written in the escrow agreement
- Accept funds from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other paperwork as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse monies and finish instructions
- Give advice - the escrow agent stays at an impartial, third-party status
- Give insight about tax implications
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 better informed home buyer and future homeowner.