Don't let the unknown prevent you from becoming a homeowner. I can help you understand the process. E-mail me at jim68@plateautel.net to get some free information.

Escrow 101

 McElroy & Associates can walk you through closing - 575 461-2100
Let's talk about "escrow". When you're closing on your new house, an escrow company is used to ensure the process will close correctly and on time. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. For example, in an online purchase, PayPal is the secure third party that obtains the buyer's funds, and then disburses the money to the seller.

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

These are the legal forms that escrow holders usually look to collect:

  • Requests for payment for various services to be paid out of escrow funds
  • Loan documents
  • Tax statements
  • Fire and other insurance policies
  • Title insurance policies
  • Terms of sale and any seller-assisted financing

You're ready to close when all steps are complete in escrow process. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then transferred to you as new homeowner and appropriate title insurance is issued as outlined in the escrow instructions.

When closing is in it's last step, you'll submit a payment to the escrow agent. I'll keep you informed on the procedure.

The Escrow Holder Will:

  • Write escrow guidelines
  • Perform a title inquiry
  • Comply with the bank's guidelines as outlined 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
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse monies and finalize instructions

The Escrow Holder Will Not:

  • Advise you - the escrow company must stay at a fair, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Petition title inquiry
  • Meet the bank's standards as noted in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse funds and finish instructions
  • Advise you - the escrow holder stays a neutral, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay rolling expenses while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

This is a quick run-down of the escrow process. Your individual process might vary depending on your lender and your escrow agent.

Looking to Buy?

Are you looking to buy a house? Let us help you. Just fill out as much of the information below that you want and we'll get right back to you, with no obligation to you. We guarantee your privacy.

Your Information
Some Details