During any real estate transaction it is important to ensure that the seller will pay the funds previously agreed upon. The buyer also needs the same guarantee that once he has paid his deposit the seller will hand over the keys, and deed or title to the property. This is the reason for escrow. What is Escrow? Escrow is simply the means to hold legal documents and money until certain conditions have been met. For sale by owner sellers are responsible for setting up the escrow account. In some cases the buyer also sets up an escrow account when buying from a home owner. This is something buyer and seller agree to, although the buyer does not need to do so. An escrow agent is a third-party person responsible for holding the title, deed and earnest deposits. He will hold the money and paperwork until all conditions for the sale are concluded. Your escrow agent will be asking you a lot of necessary questions. He is looking for a lot of specific information. Although you may not have this information readily available, you should try to get it to the escrow agent as soon as you can. The information you will need includes, but is not limited to, the following:
*The seller’s name and address
*The buyer’s name and address
*The purchase agreement
*The amount of deposit
*The buyer’s insurance agent
*The lender’s or any other financing party’s information
*The termite report information
*The closing date
Any earnest money will be deposited into a separate escrow account. The seller’s agent will handle this transaction. The agent will then begin to do a title search. The seller, the buyer and the lender will all receive the title search report when it comes back. Any loan or interest fees charged by the lender will always be included in the escrow instructions.
Choosing an Escrow Agent:
If you are working with a real estate attorney, he (or she) might also be able to act as your escrow agent. If you are a for sale by owner seller then there are several things to keep in mind if you do have to choose your own agent. Here are a few good tips:
*Always choose a reputable escrow agent or company. Talk to friends and family who have recently sold their homes. Ask them for recommendations in finding an escrow agent. What was their experience with their agent? Were phone calls returned in a timely manner? Was the agent knowledgeable, professional and courteous? These are all qualities needed in a good escrow agent.
*Choose an agent that has plenty of experience working with home owner sales. It’s even better if this agent has worked with a recent seller who worked with a real estate agent.
*Choose an agent who offers reasonable rates. Rates do vary considerably from company to company, so it is a good idea to shop around until you find the right price and the right agent. It can be a tiring job, but well worth it to find the right person to work for you.
Once you have talked to enough escrow agents, you should know what you need and who can deliver. Trust your own judgement.
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