Understanding how Escrow works – Hanley Agency, Inc., Pittsburgh, PA

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Escrow 101

Hanley Agency, Inc. can walk you through closing - 412-422-7900

Escrow: To close the sale of a home, a neutral, third party (the escrow agent) is brought into the picture to assure the transaction will close appropriately and on time. A house is said to be in escrow when in the closing process, money is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. PayPal is a simple way to think of an escrow company.

Tying up any loose ends like receiving funds, completing forms, obtaining the documents for loans and liens, and assuring you get a clear title to the home before your purchase gets finalized are all parts of closing in which an escrow holder is useful.

The certificates the escrow agent may secure include:

Loan 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

Closing on the house 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). You'll then receive the title to the home and the title insurance gets issued as stated in the escrow instructions.

When closing is finished, you'll make a payment to the escrow agent. As your real estate professional, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

Prepare escrow guidelines
Perform a title research
Comply with lender's standards as outlined in the escrow agreement
Receive funds from the buyer
Prorate insurance, tax, interest 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 have been finished
Disburse payments and finish instructions

The Escrow Holder Will Not:

Advise you - the escrow holder stays at an impartial, third-party status
Offer opinions about tax implications

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow instructions Petition title search Comply with lender's requirements as outlined in the escrow agreement Intake payments from the buyer Prorate tax, interest, insurance and other fees according to instructions Record deeds and other documents as instructed Request title insurance policy Close escrow when all instructions of seller and buyer are complete Disburse payments and finish instructions		Tell you what's best - the escrow agent must stay at a fair, third-party status Give insight about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay recurring fees while there is a loan on the house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Once you have the ABCs of the escrow process down, you can be a confident buyer.

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