Whether it's your first property or your next home, I'll educate you through the process. Call me at (314) 252-8955.

First-Time Home Buying: How To Close on a House

 Rhodes & Associates Realty can walk you through closing - (314) 252-8955
Escrow: When you're closing on your new house, a neutral, third party (known as the escrow holder or the escrow agent) is used to guarantee the transaction will close correctly and in a certain amount of time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an Internet purchase, PayPal is the neutral third party that obtains the buyer's funds, and then sends the funds to the seller.

Tying up any loose ends like obtaining funds, finishing forms, securing the documents for loans and liens, and making sure you get a clean title to the property in preparation of your purchase gets finalized are all part of the job of the escrow holder.

Escrow agents compile the following 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
  • Loan documents

Upon finishing of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then transferred to you as new owner and correct title insurance is issued as outlined in the escrow policy.

When closing is done, you'll make a payment to the escrow holder. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Perform a title research
  • Meet the bank's requirements as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments 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 complete
  • Disburse payments and finish instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company must maintain a neutral, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Perform a title search
  • Comply with the bank's standards as noted in the escrow agreement
  • Accept 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 terms of agreement of seller and buyer are complete
  • Disburse payments and finish instructions
  • Advise you - the escrow company stays a neutral, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for on-going fees while there is a loan on the house. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

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

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