| iv id="body"> | | | | it is wise to ensure that the company selected is |
| Closing is not something most buyers focus on during | | | | reputable (ask around or do a Google search). |
| their home search. Most people assume closing just | | | | Who Does What |
| kind of works itself out, but this is far from the case. | | | | - The escrow officer opens an account and collects |
| Closing--or rather, the "escrow process" in real estate | | | | your deposit (earnest money), obtains the loan |
| parlance--is complex and if something goes wrong, it | | | | information from the lender, and the contract for the |
| can really damage your deal. Savvy buyers are | | | | transaction. Near the end of escrow, the escrow |
| actively involved throughout the escrow process. | | | | officer completes a closing statement (or HUD), |
| We will go through the basics of escrow, and also | | | | showing all the costs associated with closing, including |
| cover what you, the buyer, can do to make things run | | | | your down payment. This is how you'll know how |
| smoothly. | | | | much money to the penny you'll need to bring to |
| The Basics | | | | closing--up till now, you've only seen estimates. |
| Escrow involves four primary parties: the buyer, the | | | | - The lender orders an appraisal, to ensure it's worth |
| seller, the lender and the escrow company. The | | | | what you're paying for it. (This appraisal's purpose is to |
| escrow company acts as a neutral third party (paid 50 | | | | ensure you've got enough collateral for your loan.) The |
| 50 by buyer and seller) who holds documents and | | | | appraised value is not something that the seller needs |
| funds until the transaction is completed. | | | | to know--all that matters is that the appraisal came in |
| The four primary parties will also interact with a | | | | "at value." Sometimes, a lender will let you know |
| smattering of other people during escrow, including the | | | | separately if the appraisal actually came in "over |
| realtors, home inspectors, insurance companies, and | | | | value." |
| appraisal companies. | | | | - The buyer (you!) purchases title insurance (in some |
| Escrow typically takes 1-6 weeks, depending on the | | | | cases, escrow companies can sell title insurance to |
| type of loan you have, and a number of variables out | | | | you). This insurance basically insures that the title is |
| of your control. With the recent surge in foreclosures | | | | "clean," meaning no one can come out of the |
| and government incentive programs, the real estate | | | | woodwork at some point down the road and claim |
| closing machinery has gotten a little backed up in | | | | that you don't legally own your home. You will also |
| places, so be ready for it to take longer than usual. | | | | need to purchase homeowners insurance during |
| Finding an Escrow Company | | | | escrow; you can have coverage start on your closing |
| Your Realtor can usually recommend an escrow | | | | date. Before closing, you'll have the chance to do a |
| company, or if you're buying into a condo building, the | | | | final walk-through to ensure that any repairs you |
| developer may have an escrow company that they're | | | | requested have been made and that the property is |
| working with. There are different customs in different | | | | being delivered in acceptable condition. |
| areas dictating who selects the escrow company, but | | | | |