If you purchase a home through a real estate agent, escrow will generally be handled behind the scenes, with funds deposited to ensure that taxes and insurance are paid. An escrow account is set up through a financial institution to hold all of these funds until a designated time. However, realtors are not the only ones who can set up escrow. With the right third-party service, you can set up an escrow account to hold funds when you are buying or selling property yourself.
What is Escrow?
Escrow refers to a third-party service that is part of every home purchase. When a buyer and seller initially arrive at a purchase agreement, they select a neutral third party to act as the escrow agent. The escrow agent collects a deposit from the buyer that is equal to a small percentage of the sale price. This deposit is known as “earnest money”. In exchange, the seller takes the property listing off the market. Until the final exchange is completed, both the seller’s property and the buyer’s deposit are said to be in escrow.
Working with Financial Institutions
If you are looking to set up an escrow account, your first stop should be with your own financial institution. As an existing customer, you are likely to find that they are willing to work with you on setting up an account. Also, it will be easier to transfer funds back and forth throughout the transaction since you already bank there.
If your own financial institution does not offer escrow services, another local institution likely will. Check with credit unions, as well as banks. Large, corporate lenders are more likely to offer a service like this than small, community banks.
Exploring Local Options
If you are selling your home, chances are you will end up using a local title company. This will help you ensure you have all of the paperwork you need to avoid problems throughout the sale. A title and escrow company conducts title searches to make sure the transfer is legal and takes out title insurance for the property. This type of company will hold all funds necessary for closing in an account and ensure those monies are used as they were intended.
During a home purchase, the funds that will be held in escrow will include the down payment, requested repairs and any money for taxes or insurance that the mortgage lender wants set aside. These funds will be settled at closing, at which point an escrow account will be set up with the lender for the buyer’s property taxes and homeowners insurance.
Evaluating Online Services
If you are selling a house, the internet will not be an option. For everything else, though, there are online escrow services. Escrow websites hold funds for buyers and sellers and even offer software that can build escrow into a website.
Why Choose Citrus Heritage Escrow?
When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.
Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200