What Does Closing of Escrow Mean?

An escrow account is an account set up during real estate transactions, and is held by a third party, apart from the buyer or seller. Normally, the bank or lending institutions hold these accounts and are responsible for ensuring that funds are transferred from the account as per the agreement executed.

The account is a joint account and has funds from both parties. It is a highly responsible position to be in and not only involves the financial aspects of the transaction. Even the documentation is included in the escrow arrangement and it is the holder's responsibility to make sure that documents end up in the right hands.

Closing of escrow is normally done once all transactions are completed. Once all transactions are completed and related payments are done, the holder of the escrow account produces a statement which carries, in detail, all transactions related to the real estate deal. On this date, the property legally changes hands and the title is transferred from the seller to the buyer. The insurance is also transferred on this day.

An escrow closing is the climax of the transaction. Normally, the grant deed is recorded in the relevant registry within one working day of the escrow holder receiving loan funds. This is the last step which indicates close of escrow. All these formalities are taken care of by an escrow officer, appointed by the escrow holder. After he is satisfied that all conditions have been met, he informs both parties about the closure date of escrow. After the closure is formally done, the relevant papers are distributed and subsequent entries made in the records office.

It is important that along with the officer, your agent is also involved in the closure. This makes sure that no points are left unattended and that payments made are as per agreement. Insurance is always a very tricky and expensive matter, hence needs utmost caution. Your agent can be a real estate agent who knows the documentation of a sale as well as escrow dealings.

The escrow officer follows instructions as per conditions laid out in the agreement. Only after all pre-requisites concerning the property have been met, shall only be funds disbursed to the seller. Escrow account also disburses funds related to real estate agent fees or any other closing fees as deemed appropriate.

As a normal case, escrow is not related to real estate alone. This type of account is also opened in case of major business transactions and deals outside the real estate market as well. Sometimes, funds that are under litigation are transferred to an escrow account held by a neutral party till such time as the destination of these funds are determined by the honorable court of law. These funds are huge and may run into millions or even billions of dollars.

By Ravisankar Poduval

PressSearch.org

Home Appraisal Estimate Online - 2 Big Money Saving Tips

If you are selling your home or buying a house then knowing the value of that home will save you tons of money. Getting a home appraisal estimate online could save you time, money and headaches. This article explains why every buyer needs to know the value of the home before making an offer, and why every seller needs to know the value of their house before listing the property.

Buyers - If you plan on buying a home then most likely you will have to pay for a professional appraisal before the bank will lend you money. This is to protect the bank. You should get an appraisal of the house before you make an offer. This will protect you and save you money. Most people list a home not knowing the true value of the home. As a buyer if you get a home appraisal estimate online before you make an offer you will be able to make an offer that is reasonable and based on historical data. I recommend making an offer for 3 percent less than the estimated value of the home.

Sellers - The number one reason a home doesn't sell is because the owners have priced it too high. They normally take a realtor's advice and sometimes pick a number out of the air. You want to make sure you know how much the home is really worth before picking a price. Getting an online appraisal at one of the free websites is a good idea, and getting the value from an experienced real estate agent is also a good idea. Once you have an estimate then make the price of the property a couple of percent less. This will get you more foot traffic and ultimately the home will sell sooner.

By Max Suther

PressSearch.org

Basic Short Sale Q&A

What is a Short Sale?

It is when a bank agrees to accept less than what is owed as "payment in full", in an effort to avoid the foreclosure process. The bank agrees to "write-off" and forgives the remaining portion owed.

Why would a mortgage lender agree to a Short Sale?

-Because real estate and foreclosure laws vary from state to state, the foreclosure process can take a very long time and may tie up both their financial and legal resources as they try to keep up with the different requirements in each state. This lengthy process can be very expensive for the company.

-If a Bank forecloses, the most they can hope for is to sell the property at market value. They would rather just allow a short sale, and avoid having to market and maintain the property themselves.

-Many lenders have to hold cash in reserves to balance the value of the REO properties that are on their books. Many times, this amount can be 3 time the value of the properties themselves. The more money they have to hold in reserve, the less they are allowed to lend. Mortgage companies are in the business of lending money, not selling real estate. They are more likely to just cut their losses with a short sale, so that they can go about their normal business.

What are the requirements to begin the process?

You must be behind on payments
You must have suffered a hardship (not always just a financial one)
You must have little or no equity in the home
And that's it.

Will I be responsible to pay taxes on the amount forgiven?

You may be exempt from having to claim the forgiven amount on your taxes under the "Mortgage Forgiveness Debt Relief Act of 2007".

By Joshua Talayka

PressSearch.org