Understanding how Escrow works – Hickerson Realty, Tulsa, OK

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Closing the Sale in Tulsa, Oklahoma

Hickerson Realty can walk you through closing - (918) 970-4000

Let's talk about "escrow". To finalize the sale of a house, a neutral, third party (the escrow agent) is engaged to assure the transaction will close appropriately and on time. A property is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in an Internet transaction, PayPal is the secure third party that obtains the buyer's cash, and then disburses the payment to the seller.

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

These are the legal documents that escrow agents usually look for:

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
Fire and other insurance policies

Upon finishing of all portions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the house is then given to you as new homeowner and appropriate title insurance is issued as outlined in the escrow policy.

When closing is completed, you'll make a payment to the escrow holder. I'll keep you informed on the procedure.

The Escrow Holder Will:

Prepare escrow guidelines
Request title inquiry
Meet the bank's standards as noted in the escrow agreement
Receive funds from the buyer
Prorate interest, insurance, tax and other payments according to guidelines
Record deeds and other legal documents as instructed
Obtain title insurance policy
Close escrow when all terms of agreement of seller and buyer are complete
Disburse payments and finish instructions

The Escrow Holder Won't:

Advise you - the escrow holder must stay at a fair, third-party status
Give insight about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow instructions Petition title search Comply with the bank's requirements as written in the escrow agreement Accept funds from the buyer Prorate insurance, tax, interest and other payments according to guidelines Record deeds and other documents as instructed Obtain title insurance policy Close escrow when all instructions of seller and buyer are met Disburse payments and finish instructions		Advise you - the escrow holder must maintain a neutral, third-party status Offer opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for 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.

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

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