Escrow: Securing Your Real Estate Transaction
What is Escrow?
You will hear the word “escrow” used often throughout your home buying process. The basic meaning of escrow is that it is money held by an independent third party during the process of a real estate transaction.
Who holds the earnest money?
The licensed escrow agent is an independent third party within Vision Title that will handle the real estate closing and the disbursement of the funds.
Where is the money held?
In the case of a real estate transaction, Vision Title has an escrow account to deposit the monies for the real estate transaction, including your down payment on the property, the funds you provide to cover the closing costs and your lender’s disbursement of the mortgage monies. These monies are held in the escrow account while the transaction is being finalized. From that account, the escrow agent disburses the money to all parties to the real estate transaction.
What payments are made from the escrow funds?
Vision Title receives detailed instructions from the lender regarding what must be paid at the time of closing. These payments usually include:
- Payoff of all existing mortgages
- Payoff of all existing judgments or liens
- Payment of the balance of the sales price, after mortgages are paid, to the former owner
- Real estate broker fees and commissions
- Mortgage fees and commissions
- Closing costs
- Title, homeowners and mortgage insurance
- Recording fees