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Steps to Closing on a House

 McElroy & Associates can walk you through closing - 575 461-2100
Let's talk about "escrow". An escrow agent is used to assure your house closes on time and the closing process goes smoothly. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. For example, in a Web auction, PayPal is the neutral third party that obtains the buyer's cash, and then sends the money to the seller.

The escrow holder insures that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being completed. This includes getting funds and documents, filling out required forms, and obtaining the release documents for any loans or liens that were cleared with the transaction, assuring you have a clear title to your property before the agreed upon price is fully paid.

Escrow holders collect the following records:

  • 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

Upon completion of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the home and the title insurance gets issued as agreed upon in the escrow instructions.

The escrow agent gets a payment at the completion of closing. As your real estate professional, I'll inform you of the acceptable way of paying.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Perform a title research
  • Meet lender's requirements as noted in the escrow agreement
  • Accept payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Offer advice - the escrow agent has to remain an impartial, third-party status
  • Offer opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Perform a title research
  • Comply with the bank's standards as specified in the escrow agreement
  • Receive 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 instructions of seller and buyer have been met
  • Disburse monies and finish instructions
  • Tell you what's best - the escrow agent stays a neutral, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

This is a simple outline of the escrow process. Your individual process could vary depending on your bank and your escrow company.

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