WHAT IS A REAL ESTATE CLOSING?
When we go to “closing”, you will meet with your closing attorney or a
representative from the title company, in order to transfer the property title to
you. Behind the scenes, the Seller, the Seller’s agent, and a representative from
the lending institution have completed their documents to make your closing
smooth and stress free. The purchase agreement or contract you signed describes
the property, states the purchase price and terms, sets forth the method of
payment, and usually names the date and place where the closing or actual
transfer of the property title and keys will occur.
If financing the property, your lender will require you to sign a document,
usually a promissory note, as evidence that you are personally responsible for
repaying the loan. You will also sign a mortgage or deed of trust on the property
as security to the lender for the loan. The mortgage or deed of trust gives the
lender the right to sell the property if you fail to make the payments. Before you
exchange these papers, the property may be surveyed, appraised, or inspected,
and the ownership of title will be checked in county and court records.
At closing, you will be required to pay all fees and closing costs in the form of
“guaranteed funds” such as a Cashier’s Check. Your agent or escrow officer will
notify you of the exact amount at closing.

WHAT IS AN ESCROW ACCOUNT?
An escrow account is a neutral depository held by your lender for funds that will
be used to pay expenses incurred by the property, such as taxes, assessments,
property insurance, or mortgage insurance premiums which fall due in the future.
You will pay one-twelfth of the annual amount of these bills each month with
your regular mortgage payment. When the bills fall due, the lender pays them
from the special account. At closing, it may be necessary to pay enough into the
account to cover these amounts for several months so that funds will be available
to pay the bills as they fall due.