Escrow is basically a joint account or a trust fund which is held as a deposit until the legal ownership of the property is transferred from the seller to the buyer or the sale of a real estate property has been fully accomplished. It is the third party which takes care of responsibilities like payment of property taxes, insurance, and related obligations while the house is still under mortgage. This account also makes sure that no exchange of funds and properties takes place until all the instructions in the escrow agreement are met.
Close of escrow is basically another term for closing. It is the final step after which the official transfer of property ownership is done.
Towards the end of the sale of property, the Escrow account is closed by the Escrow holder when all the terms and conditions in an escrow have been strictly met. The Escrow holder then pays out the funds by paying the necessary bills like property taxes and insurance. The accounting of all these funds can be done through a closing or settlement statement. This is done in order to keep all the transactions transparent and clear.
Once a deal is signed and sealed by both the parties, the Escrow is said to be closed. The Escrow holder is the closing agent. He also becomes the settler of the transaction. Both the buyer and the seller should be present at the time of close of Escrow as they would have to sign the papers. The buyer and the seller can also bring their lawyers along with them.
Both the parties should make sure that they have a copy of all the documents related to the closing of the escrow along with the settlement statement. Also, both the parties should ensure that the necessary paperwork has been forwarded to the corresponding offices for the registering of deeds and transferring of titles.
A thorough knowledge and experience on how an escrow works is very important as it would help you to make better and safer investments. This third party is very helpful in safeguarding your property and finances throughout any real estate transaction. Therefore, it is very important to get thoroughly acquainted with all the instructions given for it.
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