For first-time home buyers, escrow is a process that might seem shrouded in secrecy and it's true that this process can be a bit confusing. Escrow is a stretch of time that begins when a seller decides to accept an offer you have made on their home, and it ends on the day you actually own your new home.
Escrow technically refers to the third party that handles all of the real estate documents and deals with the money that changes hand during the selling process. To start an escrow, you open an account and give the escrow company a check.
This amount of money is not as much as your down payment, and eventually it will be applied to your down payment. It is what is known as "earnest" money showing that you are serious about buying the home. You and the seller will also sign an escrow contract.
After the contract is signed and the check is received, then it's time to handle all of the many tasks that must occur prior to closing. First, the bank that is lending you the money for your home loan will appraise the property to ensure that it is not worth less than you are paying. If the appraisal comes back with a lower value, the bank might deny the loan and you will have to appeal the appraisal, find another lender or re-negotiate the purchase price with the seller.
In addition to the appraisal, you also will want to have the property inspected carefully. Just like with an appraisal, these inspections generally are paid for by the buyer. You need to hire a home inspector and probably a termite inspector. If you live in any area prone to earthquakes or ground movement, a geologist is another professional who should come out and inspect the home. Of course, in addition to these inspections, the seller must disclose any known problems with the home.
Usually the inspector will find a few issues that need attention. They might be minor, such as a window that is difficult to open or perhaps a leaky faucet. Sometimes there are more serious issues, such as mold or perhaps the roof needs to be replaced or the home has serious termite issues. If you don't wish to deal with these big issues, you can walk away from the house and get out of escrow or you can negotiate with the seller to fix some of the problems or provide extra money for repairs in the escrow account once the sale goes through.
Assuming there are no major issues upon inspection, you will continue further down the path toward home ownership. This means you will need to get insurance for your new home, and you set this up prior to purchasing the home. In some places, you also must get flood insurance. You also must have a title report and what is known as title insurance. This simply ensures that there are no liens that have been placed against the home. A title company might handle this or it might be the escrow company.
Escrow might seem endless, but usually it only lasts about 30 days or so, although it can be extended by weeks or months. In the days immediately preceding the close of escrow, you will get the opportunity to walk through the home for a last inspection. You will visit the escrow company and sign a myriad of papers and on that last day, the lender will provide the money for your loan, which effectively pays off the seller and transfers ownership to you. The staff at Nixon Real Estate not only can help you find great options for Texas Hill Country real estate, especially Fredericksburg real estate, they also can answer many of your questions regarding escrow.
Escrow technically refers to the third party that handles all of the real estate documents and deals with the money that changes hand during the selling process. To start an escrow, you open an account and give the escrow company a check.
This amount of money is not as much as your down payment, and eventually it will be applied to your down payment. It is what is known as "earnest" money showing that you are serious about buying the home. You and the seller will also sign an escrow contract.
After the contract is signed and the check is received, then it's time to handle all of the many tasks that must occur prior to closing. First, the bank that is lending you the money for your home loan will appraise the property to ensure that it is not worth less than you are paying. If the appraisal comes back with a lower value, the bank might deny the loan and you will have to appeal the appraisal, find another lender or re-negotiate the purchase price with the seller.
In addition to the appraisal, you also will want to have the property inspected carefully. Just like with an appraisal, these inspections generally are paid for by the buyer. You need to hire a home inspector and probably a termite inspector. If you live in any area prone to earthquakes or ground movement, a geologist is another professional who should come out and inspect the home. Of course, in addition to these inspections, the seller must disclose any known problems with the home.
Usually the inspector will find a few issues that need attention. They might be minor, such as a window that is difficult to open or perhaps a leaky faucet. Sometimes there are more serious issues, such as mold or perhaps the roof needs to be replaced or the home has serious termite issues. If you don't wish to deal with these big issues, you can walk away from the house and get out of escrow or you can negotiate with the seller to fix some of the problems or provide extra money for repairs in the escrow account once the sale goes through.
Assuming there are no major issues upon inspection, you will continue further down the path toward home ownership. This means you will need to get insurance for your new home, and you set this up prior to purchasing the home. In some places, you also must get flood insurance. You also must have a title report and what is known as title insurance. This simply ensures that there are no liens that have been placed against the home. A title company might handle this or it might be the escrow company.
Escrow might seem endless, but usually it only lasts about 30 days or so, although it can be extended by weeks or months. In the days immediately preceding the close of escrow, you will get the opportunity to walk through the home for a last inspection. You will visit the escrow company and sign a myriad of papers and on that last day, the lender will provide the money for your loan, which effectively pays off the seller and transfers ownership to you. The staff at Nixon Real Estate not only can help you find great options for Texas Hill Country real estate, especially Fredericksburg real estate, they also can answer many of your questions regarding escrow.
About the Author:
Pammy McGrath likes reading real estate blogs. If you are searching for licensed Fredericksburg TX real estate agents, or to find Fredericksburg homes for sale, please visit the NixonRealEstate.com site now.
No comments:
Post a Comment