Get Answers to Commonly Asked Questions About the Escrow Process
If you have never had reason to go through the escrow process in the past, it is understandable that you would have questions. You can contact Neighborhood Escrow at 310-378-2456 with questions you might have, or keep reading to see if they are answered below.
What Does it Mean to Be “In Escrow”?
Escrow begins when an officer is placed on a home, the seller accepts the offer, and earnest money is paid. The earnest money is held in an escrow account and is not distributed to the seller until all included contingencies have been satisfied and the home purchase is final. Escrow continues through the closing, which is generally at least one month after it is opened.
How Do I Set Up Escrow?
You don’t need to worry about this. Your title agent, attorney, or escrow company is paid for this service and will handle it for you. Neither the buyer nor the seller is involved in setting up escrow or closing it when the sale is over.
How Much Will Be in My Escrow Account at the Time of Closing?
The lender will be able to tell you this. Generally speaking, the average lender requires a buyer to put two months of estimated property taxes, homeowners insurance payments, and mortgage insurance payments (if required) into escrow. If you want more information on the specific amount you will be expected to have in your escrow account, contact your lender.
What Do I Do If I See a Mistake on My Escrow Account?
It is wise to keep an eye on your account because you can be held liable for making sure payments are on time. Yes, your loan service is required to handle property tax and insurance payments, but things can fall through the cracks. During closing, it is wise to doublecheck the following:
- Tax rates
- Property taxes
- Due dates for tax and insurance
- Escrow balances
If you see that payments are not reflected, that your taxes have been computed incorrectly, that the due dates are not in line with what you have found, or that your escrow balance is off, then you should talk to your loan service and/or the escrow company. These are generally simple mistakes to take care of if they are found quickly.
How Do I Choose the Right Escrow Company?
You don’t. Your title insurance company will choose the escrow company and get it set up for you. All you have to do is reply to any requestions for information as quickly as you can.