To finalize the sale of the home a neutral, third party (the escrow holder, a.k.a. escrow agent) is engaged to assure the transaction will close properly and on time. The escrow holder insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you clear title to your property before the purchase price is fully paid.
The documentation the escrow holder may be collecting includes:
Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the seller and appropriate title insurance is issued as outlined in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form.
The Escrow Holder Will:
The Escrow Holder Won't:
Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going expenses while there is a loan on the house. These expenses include property taxes, home insurance, mortgage insurance, and other escrow items. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
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There are certain typical costs linked to closing the sale of a house. These expenses are commonly split between the buyer and seller, as noted in the sales contract. Many are customary, but there are nuances to each, so you'll want a real estate expert in Ohio to help show you through your deal.
Costs pertaining to your mortgage to be paid at closing (Click here for more information)
Taxes commonly paid at closing (Click here for more information)
At closing, these fees are often due (Click here for more information)
Sellers: As we negotiate your sale, not only will I work to get the very best sales price, but I'll also push for reduced closing costs. And once we've come to an agreement, I'll fully clarify the closing costs so you know exactly what you're paying for.
Buyers: If you are buying a home in Hamilton County, you'll be given a "Good Faith Estimate" (GFE) of closing costs within three days of submitting your loan application. The estimate is based on the loan officer's previous experience and is required to be within a reasonable range so you're not surprised when you get to closing time. I'll be happy to review the GFE with you, answering your questions and highlighting any estimates that seem off.
Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).
The following information is supplied for informational purposes and should not be relied upon as legal definitions.
Buying with Others
Additional Ways to Hold Title
Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house, you'll want to know that no other individual or entity has a right, lien or claim to the property.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your "owners" policy as well as the "lenders" policy.
One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
Tax Closing Costs
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the seller occupied the property.
Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.