Understanding how Escrow works – Mendes Residential, San Diego, CA

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What To Expect When You're Closing in San Diego, California

Mendes Residential can walk you through closing - (619) 312-6800

First, a little about "escrow". When you're closing on your new property, an escrow agent is used to make certain the process will close appropriately and in a specific time frame. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. For example, in a Web transaction, PayPal is the secure third party that holds the buyer's funds, and then hands over the funds to the seller.

The escrow company makes sure that the terms and conditions of the agreement between the two parties are reached prior to the sale being finalized.

Escrow companies compile the following forms:

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

You're ready to close when all steps are finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then transferred to you as buyer and correct title insurance is issued as outlined in the escrow policy.

When closing is completely finished, you'll submit a payment to the escrow holder. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

Assemble escrow guidelines
Petition title research
Meet lender's requirements as written in the escrow agreement
Intake funds from the buyer
Prorate interest, insurance, tax and other payments according to guidelines
Record deeds and other legal documents as instructed
Request title insurance policy
Close escrow when all terms of agreement of seller and buyer have been finished
Disburse monies and finalize instructions

The Escrow Holder Will Not:

Advise you - the escrow company stays a neutral, third-party status
Offer opinions about tax implications

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow guidelines Petition title search Meet the bank's requirements as written in the escrow agreement Intake funds from the buyer Prorate insurance, tax, interest and other payments according to instructions Record deeds and other documents as instructed Obtain title insurance policy Close escrow when all instructions of seller and buyer have been finished Disburse monies and finalize instructions		Tell you what's best - the escrow company must maintain a neutral, third-party status Offer 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. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

This is a simple outline of the escrow process. Your particular process will be slightly different depending on your bank and your escrow agent.

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