The process of home escrow is relatively simple, but many buyers and sellers over complicate the concept. Escrow is simply a third-party entity in a transaction between a buyer and seller. This ensures that both parties have completed their end of the arrangement before the property title and the money required to perform the transaction are transferred to the correct entity. In most real estate transactions, especially those dealing with lending institutions, escrow will be a part of the process and all involved should think of it as a safety blanket.
Place The Down Payment In Escrow
Buyers who are working with a lending institution will likely have to place the down payment into escrow. In a typical loan, this will amount to about 20% of the purchase price and buyers should have this on hand before proceeding with a real estate transaction.
Purchase Price Of Property In Escrow
After a loan has been approved, the bank will generally move forward by placing the purchase price of a property into escrow. This sum of money will be transferred over to a seller as soon as escrow has closed.
Placing Closing Costs In Escrow
In most cases, buyers will be responsible for placing the closing cost in escrow. These individuals should consult with their lending institution in order to understand exactly what they must place into escrow in order to allow the transaction to complete in a timely manner.
Property Deed In Escrow
The seller of a property will put their property deed in escrow and wait for a buyer to fulfill their half of the deal. If a buyer submits the necessary money and paperwork, the deal will likely close on the closing date, allowing the title to be transferred over to the buyer.
The escrow agency is bound to the rules of the contract and are unable to share any information with the parties involved regarding the process. This company simply waits for both sides to fulfill their end of the deal and allows the transaction to proceed smoothly. In this way, one doesn’t have to worry about dealing with a seller or buyer who doesn’t intend to complete the deal. Those who work with an escrow company can be confident that the deal will go through if all the requirements are met. If so, the process will complete at the stated deadline and both parties should end up receiving their half of the deal.
Escrow fees are usually $250 plus $2 per $1,000 of a property’s purchase price. In other words, a $300,000 home will likely require an $850 fee paid in full to the escrow agency. In most cases, these fees aren’t negotiable and are simply part of the process of real estate transactions.
How To Work With Escrow
Both buyers and sellers need to fulfill their end of the deal, if they want escrow to move forward at the closing date. If one part of the transaction is held up, escrow agents will not be able to allow the transfer to take place and delays are likely to result. Those who understand what is expected of them regarding escrow should be able to allow the transaction to continue as planned.
Not sure how escrow works for your Jacksonville, NC real estate transaction? Contact us at firstname.lastname@example.org.