In real estate transactions, there needs to be a way for the buyer to ensure that the seller will indeed pay for the funds agreed upon. Similarly, the buyer needs a way to guarantee that, once his or her deposit is paid, the seller will hand over the deed or title for the property. This is where escrow is.
As a for sale by owner home seller, you happen to be responsible for setting up, or opening, the escrow account. The escrow agent would have been a third-party who is responsible for holding the title or deed on the property as well as earnest deposits made on the part of the buyer. The purpose of an escrow is to hold legal documents and money until certain conditions, agreed by you and the buyer. The escrow agent holds money and property ownership until these conditions have been met.
In many for sale by owner transactions, both the seller and the buyer open escrow accounts. There isn?t standard way of one or the other. Rather, it depends on which you and the buyer agree.
To process your escrow instructions accordingly, the escrow agent might request several pieces of information. You mightn?t have all the information available immediately, but you should get it towards the escrow agent as soon as possible. This information includes, but is not limited, to the following: Your (the owner) name and address, buyer?s name and address, purchase agreement, level of deposit, buyer?s insurance agent, lender?s information, termite report information and closing date.
If there is an earnest money deposit, the escrow agent will set it into a separate escrow account. The agent might order a title search. In accessory for you and the buyer, the financial institution will receive a report on this information. Any loan and interest charges charged by the lender will likely be included in the escrow instructions.
If you are choosing an escrow agent, there are lots of factors that you should take into account. If you are working with a real estate attorney, he or she could probably act as the escrow agent too. In any case, here are some tips on choosing an escrow agent.
Select a reputable escrow agent or company. Friends or family that have recently sold property are perfect places to get ideas for an escrow agent. Ask the references relating to experience with the agent. Did he return messages or calls in a timely manner? Was he courteous and professional? Was he knowledgeable?
Choose an escrow which includes experience in for sale by owner housing transactions. It is most beneficial to choose an escrow that has previously worked in a transaction in which the seller didn?t work with a real estate agent.
Choose an escrow with reasonable rates. Since rates consist of one company to another, it is a good practice top check around to get an idea of the rates that are available.
After talking with several escrow agents and having a feel for their professionalism, experience, and rates, you are prepared to make an educated decision.
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Tags: attorney, escrow, FSBO, home, home buyer, home purchase, home sale, home seller, home warranty, lawyer, legal, mortgage, paperwork, piece of mind, real estate, real estate contracts, real estate transaction, realtor, reference, safety, title company
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