What Does Close Of Escrow Mean In Real Estate?
The Process Of Escrow Agreements & Its Implications
Have you heard the term “close of escrow”? It’s a common word in real estate transactions, but many people think it’s strange or weird. Fortunately, a Tortosa realtor can help you learn all about its meaning and use.
The term “close of escrow” is used only in real estate transactions. When a buyer and seller agree on a home sale price or agree to a contract, they sign what is called an escrow agreement.
The close of escrow is only part of this agreement, but what other things does it involve? Check the information below to see.
What Exactly Is Escrow?
When someone decides to buy a house, three financial accounts are present.
The first belongs to the buyer, while the second belongs to the seller. The third account is what we call an escrow account. This type of account holds the money until all the conditions for sale are ready.
The term “escrow” refers to a neutral third party holding funds and property until the transaction is officially closed. Depending on your mortgage type, your lender may require you to keep a year’s worth of taxes and insurance after the sale is complete.
How Is The Process?
You and the seller can open escrow after receiving an accepted purchase agreement. You will need to complete the following steps:
Select A Title Company
Working with a The Villages realtor is usually the best way to simplify this process. In this part, you and the seller must agree on an escrow agent, which is usually a title company or a closing attorney.
If you work with a Realtor, their broker might recommend holding the earnest money funds. Once you’ve decided on a company, you’ll send the escrow agent the details of the sale, including the property details, agreed-upon purchase price, and legal names of all parties involved.
Check The Seller’s Disclosure
A seller’s disclosure is a document that details all the notorious issues and flaws with the property. This document is necessary to protect the buyer and the seller as well as to encourage a sale with full knowledge.
Carefully check this document because once signed, any defects you list are no longer reasons to cancel the purchase.
Finish All Appraisals & Inspections
Now is the best moment to finish any essential safety checks or appraisals. Many lenders require an estimation, and a buyer may or may not want a property inspection.
If there are any major issues, now is the time to ask the seller to fix them or modify the purchase price to compensate.
Depending on the sale, a Rancho Mirage realtor might recommend you consider these inspections to get the best out of the agreement. However, you must remember to include a deadline with any request you make.
If the seller does not finish the renovations by the agreed-upon date, you have the option to cancel the transaction.
Check The Escrow Paperwork
The buyer will receive escrow documents once the inspection and appraisal have been completed. Carefully check these documents to avoid mistakes.
You can review these documents with a real estate attorney. You will also need to submit a cashier’s check for the down payment, closing costs, and lending fees.
Before Closing Escrow, Inspect The Property
The escrow company will announce the expected close date once all necessary documents have been submitted and approved. You should do a final walk-through of the property to ensure that it is in the same condition as when you made the offer. Otherwise, if you proceed with the escrow close, you may have little recourse if problems arise later.
Meet & Sign The Closing Paperwork
If you think everything is ok, you will be ready to meet with the necessary staff to sign the documents. You’ll meet with the seller, a Maricopa realtor, the title company, and the escrow company.
Your lender may ask for other documents. Some lenders, for example, may require you to deposit a year’s worth of insurance and taxes into the escrow account before closing the sale.
Which Documents Are Required For Escrow Closure?
Depending on how you are financing the purchase, different documents may be required to close escrow.
For example, you will require a transfer deed if you are paying cash. However, we can give you a brief list of the frequently-required documents in these transactions:
- Transfer deed (necessary with a mortgage loan)
- Bill of sale
- Seller’s affidavit
- Mortgage Application
- Closing disclosure
Your lender may ask for additional documents depending on the loan and the difficulty of the property title.
Hire A Top-Rated Maricopa Realtor
We highly suggest contacting a trusted Maricopa realtor to make this process as easy as possible. At The Maricopa Real Estate Company, we can give you the realtor you need to find the best deal. Whether you’re selling or buying a property, contact us so we can help!
The Maricopa Real Estate Company
21300 N John Wayne Pkwy Suite 101
Maricopa, AZ 85139