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What is Escrow ?

Escrow is an impartial third party acting as an agent for both the seller and buyer, in carrying out instructions, delivering papers and documents and disbursing funds.

  • Escrow is entrusted with the job of seeing that the transfer of ownership from the Seller to the Buyer takes place according to the terms of the written contract agreed upon by all parties involved.
  • Escrow keeps or holds any funds or documents safely until all the details have been settled and disburses them to the proper parties at the proper time.
  • At the actual time of the closing, whereby all the parties come together to sign their appropriate documents, the seller will be asked to provide clear title to the property and the buyer will be asked to provide the funds needed to close the sale. If there is a mortgage or loan involved, the closing of the mortgage also takes place at this time.

Who Pays for What in the Real Estate Transaction?

The Seller Generally Pays for:

  • Real estate commission
  • Escrow fee (50%)
  • Document preparation fee
  • Documentary transfer tax ($1.10 per $1,000 of sale)
  • Any city transfer conveyance tax (according to contract)
  • Any loan fees required by buyer's lender (government loans)
  • Payoff of all loans in seller's name
  • Interest accrued to lender being paid off
  • Termite inspection (according to contract)
  • Home warranty (according to contract)
  • Any judgments, tax liens against the seller
  • Tax proration
  • Any unpaid homeowner's dues
  • Recording charges to clear all documents of record against seller
  • Any bonds or assessments (per contract)
  • Any & all delinquent taxes
  • Homeowner's association transfer document fees
  • Homeowner's title insurance policy premium
  • Zone disclosure report

The Buyer Generally Pays for:

  • Title insurance premium for lender's policy
  • Escrow fee (50%)
  • Document preparation (if applicable)
  • Recording charges for all documents in buyer's name
  • All new loan charges, except those paid by seller (government loans)
  • Interest on new loan from date of funding to 30 days prior to first payment date
  • Termite inspection (according to contract)
  • Assumption/change of records fee for takeover of existing loan (if applicable)
  • Inspection fees (house, roof, geological etc,)
  • Fire insurance premium (first year)
  • Next month's HOA fee(s)