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What is Escrow?

 Hickerson Realty can walk you through closing - (918) 970-4000
First, a little about "escrow". When you're closing on your new home, a neutral, third party (known as the escrow holder or the escrow agent) is used to make certain the transaction will close appropriately and on time. A place is said to be in escrow when in the closing process, funds is secured by a third party on behalf of two parties when the transaction is taking place. For example, in a Web auction, PayPal is the neutral third party that holds the buyer's payment, and then hands over the funds to the seller.

The escrow holder insures that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being finished. This includes securing monies and records, completing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your house before the purchase price is fully paid.

The documents the escrow agent may obtain include:

  • 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

Closing on the house takes place when all of the procedures of the escrow are finished. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. You'll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.

At the close of escrow, in an acceptable form to the escrow. I'll keep you up-to-date on the procedure.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Petition title research
  • Meet lender's guidelines as written in the escrow agreement
  • Receive funds from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse payments and finish instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company has to remain an impartial, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Request title research
  • Meet the bank's standards as outlined in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse payments and finish instructions
  • Advise you - the escrow holder stays at an impartial, third-party status
  • Offer opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay on-going fees while there is a loan on the house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

This is a easy to understand guide about the escrow process. Your specific plan will vary depending on your bank and your escrow holder.

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