Escrow Accounts and The Closing Process

/ Categories: Realtor, Residential

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Escrow Accounts and The Closing Process

Escrow accounts and the closing process

Escrow accounts are an essential part of the closing process in real estate. A contract may require the buyer to provide an earnest money deposit as to show the seller their sincerity in purchasing a property. To start, the escrow account holds fund in an account established by a closing agent or attorney, and then funds are then disbursed on behalf of others.

The Key Player in the Closing Process

Secondly, the buyer involved in the transaction will select the closing agent (also known as a settlement agent) to act as a third-party to handle the real estate purchase agreement or sales contract. For example, the closing agent could be a title company or an attorney.

The Role of the Closing (Settlement) Agent

The settlement/closing agent may have a duty to arrange and track the requirements outlined within the purchase agreement. These might include home inspections, the purchase of homeowners insurance, the completion of negotiated repairs, and financing requirements. Listen to your closing agent. They are familiar with the closing process and have worked with escrow accounts before.

The Escrow Process

Next, once all transaction requirements are met, and all documents are signed, the closing agent will then disburse funds to the seller and other parties, in line with the purchase agreement.

How much does it cost?

Depending on the initial agreement, the buyer or seller cover the closing costs and the costs of settlement services contingent on certain conditions.

Conclusion

Buyers and sellers need to meet all tasks within the purchase agreement. Consequently, funds are disbursed to the appropriate parties. Finally, the transaction is complete!

To learn more about the Closing Process by visiting our Document Library.

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