Closing & Escrow Agreements
Elite Title Solutions manages all the minute details and paperwork to make your home buying experience a happy occasion.
Most people do not encounter the word “escrow” until it becomes a part of their lives, but it is one of the most beneficial resources available to homebuyers and sellers alike. The purpose of an escrow agreement is to protect the assets of both parties during a real estate transaction.
What Happens in Escrow?
Escrow is a process in which the buyer and seller submit written instructions, documents, and funds to a neutral third party in order to accommodate the financial needs and interests of everyone involved in the transaction. This information will stay with the neutral third party until a specific set of conditions is met.
In a standard real estate transaction, the buyer does not pay the seller directly. Rather, the buyer deposits the funds to an escrow company who certifies that the title to the property is clear and all instructions in the contract are met. After that point, the company transfers ownership of the property to the buyer through a process called recordation, and the seller is paid.
Basic Closing Steps
Although no two real estate transactions are exactly the same, there are some general steps homebuyers can expect to take each time they close on a property.
Set up an escrow account
As soon as the seller accepts the purchase agreement, you should have an escrow account in place to deposit any “good faith” or earnest money you as the buyer have offered.
Request a home inspection, if desired
After the purchase agreement is signed, you may wish to have the home inspected by a licensed professional in order to be sure that there are no hidden defects or structural problems present before you buy the property.
Complete your mortgage application
If you are borrowing money to purchase a home, you will need to begin the loan origination process with the lender of your choice.
Get the property appraised and secure your loan approval
Your lender will request an appraisal of the property to ensure that the home is worth the amount you are borrowing, and then review your application before your mortgage loan is approved.
Obtain a clear title and title insurance
You will need the help of a reputable title company who can do the necessary title research, correct or address any defects or errors in the property title, and secure your title insurance policy to protect your investment from any unforeseeable problems that could arise in the future.
Schedule the official closing
Once all the previous requirements have been satisfied, the title company will make appointments for the buyer, the seller, the lender’s representative, any title agent, attorneys, or real estate agents involved in the transaction to meet for the formal closing.
Attend the closing appointment
At the formal closing, you will sign all of the papers that finalize the official transfer of ownership for your new home. Plan to set aside two or more hours for this appointment to make sure you have enough time to review and sign each document, and bring a copy of your purchase agreement so you can be certain that nothing has changed.
What Are the Responsibilities of Each Party in Escrow?
It is important to understand the responsibilities of each party in escrow in order to promote a successful transaction process. Both the buyer and the seller have the duty of loyalty, the duty to make full disclosure, and the duty to practice a great deal of care to conserve the money placed in escrow and pay it only to the rightful parties.
When it comes to the escrow officer’s duties, these include:
Receiving and holding buyer’s funds in a non-interest paying trust account during escrow
Reading and complying with all agreements in the Purchase Contract and Joint Escrow instructions
Abiding by the instructions agreed upon by the buyer and seller
Preparing Escrow Instructions and General Provisions
Obtaining reports as needed
Ensuring the escrow has signatures of both the buyers and sellers
Ordering evidence of insurance from the buyer insurance agent
Sending signed loan documents to the new lender
Ensuring that all necessary funds are paid and the necessary paperwork is in order
Ensuring that the conditions are agreed upon by the buyer and seller
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The team at Elite Title Solutions, LLC can help you protect your greatest asset by assisting you through every step of the title insurance and closing process with dependable, personable guidance. Don't settle for a company that will outsource or leave your business on the back burner until someone can "get around" to helping you. Start moving forward today with a free, no-obligation consultation from Elite Title Solutions in Hammond.