close of escrow

Close of Escrow: When you’re buying a home, one of the most important steps in the process is the closing of escrow. This is the final stage of the home buying process, where all the funds are transferred and ownership of the property is transferred from the seller to the buyer. The term “close of escrow” is often used interchangeably with “closing” or “settlement.”

What is Escrow?

Escrow is a neutral third-party service that helps ensure a smooth transaction between a buyer and a seller. Escrow agents, also known as settlement agents, hold funds and important documents related to the sale of the property until all the terms of the agreement are met. This includes making sure that the title is clear, taxes and insurance are paid, and all necessary paperwork is completed.

The escrow process typically begins once the purchase agreement is signed by the buyer and seller. The buyer then deposits earnest money into an escrow account, which is held by the escrow agent. This money serves as a good faith deposit and shows the seller that the buyer is serious about purchasing the property.

Once all the contingencies in the purchase agreement are satisfied, such as the home inspection and financing, the buyer’s lender will send the loan documents to the escrow agent for review. The escrow agent will then prepare a settlement statement, also known as a closing statement, which outlines all the costs associated with the transaction.

What is Close of Escrow?

Close of escrow refers to the moment when the escrow process is completed, and ownership of the property is transferred from the seller to the buyer. This typically happens when all the necessary paperwork has been signed, and all the funds have been transferred to the appropriate parties.

  • During the close of escrow, the following typically occurs:
  • The buyer signs the loan documents and provides any remaining funds needed to complete the purchase.
  • The seller signs the deed, transferring ownership of the property to the buyer.
  • The lender funds the loan, providing the necessary funds to purchase the property.
  • The title company records the deed with the county, officially transferring ownership of the property to the buyer.
  • The escrow agent disburses funds to the appropriate parties, including the seller, real estate agents, and any other parties involved in the transaction.
  • Once the close of escrow is completed, the buyer will receive the keys to the property and can officially take possession of the home.

Close of escrow is a critical step in the home buying process, and it’s essential to understand what it means and what happens during this stage. Working with a reputable escrow agent can help ensure a smooth and successful transaction. By understanding the process, you’ll be better equipped to navigate the complexities of buying a home and make the experience a positive one. Call Abo Capital today to discuss your real estate venture at (310) 984-8028, we’ve helped thousands navigate the lending process for over 35 years.