Understanding how Escrow works – Greater R.I. Properties, LLC, North Kingstown, RI

Whether it's your first property or your next property, I'll walk you through the process. E-mail me at nzart@hotmail.com to get some free information.

I'll Champion for You Through Closing

Greater R.I. Properties, LLC can walk you through closing - 401-932-9005

Let's talk about "escrow". When you're closing on your new home, an escrow holder is used to insure the process will close correctly and in a timely manner. A house is said to be in escrow when in the closing process, funds is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. An easy way to understand the concept of what an escrow company does is to think of how you might use PayPal for online purchases.

The escrow agent makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finalized.

These are the pieces of paperwork that escrow agents usually look to collect:

Terms of sale and any seller-assisted financing
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

Upon completion of all portions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. Title to the home is then transferred to you as new homeowner and correct title insurance is issued as outlined in the escrow policy.

At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you up-to-date on the procedure.

The Escrow Holder Will:

Prepare escrow guidelines
Request title search
Meet the bank's standards as outlined 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
Obtain title insurance policy
Close escrow when all terms of agreement of seller and buyer have been finished
Disburse payments and finalize instructions

The Escrow Holder Won't:

Tell you what's best - the escrow holder must maintain a neutral, third-party status
Dispense opinions about future tax estimations

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow instructions Request title inquiry Meet the bank's guidelines as noted 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 Request title insurance policy Close escrow when all terms of agreement of seller and buyer have been met Disburse funds and finish instructions		Give advice - the escrow company stays at an impartial, third-party status Dispense opinions about tax implications

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your 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.

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