How Escrow Works

How Escrow Works

Whether you are buying your first house or your next house, we will assist you through the process. Contact Revolution Realty's knowledgeable New Orleans-area real estate brokers (504) 309-7224 and we will help you become a well-informed buyer.

The Place is Almost Yours

Escrow: An escrow holder will assure you that your home closes on time and that the money exchanging part of the closing goes smoothly. Escrow holders hold money safely in an escrow account in transactions between a buyer and seller. The escrow holder makes sure that the terms and conditions of the agreement between the buyers and the sellers are completed in preparation of the sale being finalized.

The documents that an escrow holder may collect include:

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

You are ready to close when all allocations are done in the escrow process. All monies owed and fees are taken and paid off at this time (expenses such as title insurance, inspections, real estate commissions). You will then secure the title to the house and the title insurance gets dispersed.

The escrow company gets a payment when the closing is completed.

What does an Escrow Holder Do?
  • Prepare escrow instructions
  • Petition title research
  • Comply with lender's guidelines as per the escrow agreement
  • Receive funds from the buyer
  • Prorate payments such as insurance, tax, and interest according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of the agreement are completed between the buyer and the seller
  • Disburse funds and complete the closing process as per instructions

What an Escrow Holder Doesn't Do:
  • Give advice - the escrow company is a neutral, third-party company
  • Give opinions about your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is created to pay recurring costs, while there is a loan on the house. The Escrow Account is partially paid at the closing and the buyer makes on-going payments included in their monthly mortgage payment. Home owner's insurance is an example of one of these recurring costs.

Now that you know more about being in escrow you have become a better informed buyer and future home owner.

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