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

 Scott Trahan Realty Brokerage can walk you through closing - 503-723-7000

Escrow
When you're closing on your new property, an escrow holder is used to guarantee the process will close appropriately and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web auction, PayPal is the neutral third party that obtains the buyer's money, and then hands over the money to the seller.

The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being completed. This includes securing monies and certificates, filling out required forms, and obtaining the release documents for any loans or liens that have been cleared with the transaction, assuring you have a free title to your place before the final price is fully paid.

Don't let inexperience with the real estate industry scare you from becoming a homeowner. I can help you become knowledgeable about the process. Contact me and I'll make sure you're a well-informed buyer.

These are the documents that escrow agents usually compile:

  • Loan 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

Upon completion of all portions of the escrow, closing can take place. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to you as now current homeowner and correct title insurance is issued as noted in the escrow instructions.

When closing is completely finished, you'll make a payment to the escrow company. As your agent, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Perform a title research
  • Meet the bank's standards as written in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are complete
  • Disburse monies and finalize instructions
  • Advise you - the escrow agent must maintain a neutral, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Once you have the basics of the escrow process down, you can be a more assured buyer.