After all the searching, your offer has been accepted and you are just close to own a home!!! Hold on! Do you know about escrow?
What is escrow?
It is a legal agreement by which the money, property titles and other securities are kept with a third-party during the transaction. During real estate deeds, the money is placed in an escrow account. The account holds funds that are intended for insurance premiums and real estate taxes that have been paid in advance to use at the later stage.
Relevance of escrow account
It is required prior to closing a real estate deal. Mortgage lenders require an account to make sure all the costs are met during closing. It is because the agent cannot release funds until all the conditions of the sale are fulfilled, both the parties have completed the paperwork and all other matters are settled. The account holder protects everyone’s interest during such transactions.
The role played by the holder
- He/she makes sure all the terms and conditions are met before releasing the funds.
- The professional prepares the instructions, title search and purchases the title insurance.
- He/she also reviews the requirements needed for the transaction to make sure everything ends up well.
- The expert also examines tax, interest and other payments required during the deal.
- When all the instructions are completed, he/she closes the account and necessary paperwork.
- The account holders cannot advise buyers and sellers. Their status is neutral.
Choosing an escrow company- questions to ask
- Know their experience. How long have they been working in the field?
- What are their working hours? If you need, can they stay late?
- How do they handle the account?
- What are their fees?
- What kind of support and co-operation do they expect from you?
Once you are done with the search process, choose an agent that you feel comfortable working with. Your choice of a professional is the most crucial decisions you make as a real estate investor.
It is very relevant to use escrow so that the interest of both the parties is protected. It also protects you against fraud and also guarantees that expenses like property taxes and insurance are made on time. As a home buyer, you will be secured to know that the money is going where it should.
For details on escrow, get in touch with All Florida Title. We will be happy to help you.