What you need to know about the escrow process
As a homebuyer there are a lot of terms thrown around in the real estate world that not everyone fully understands. Therefore, as a home buyer it's important to learn more about what is escrow and how it can help you during the purchase of a new home.
An easy way to explain the term, “escrow” is to compare it to a sort of third party bank that holds your earnest money and regulatees payments or funds. The beauty of an escrow account is that it helps to protect both parties by keeping everyone’s “hands-off” the money until an agreement is made!
In the process of buying a home, escrow can be a great asset to controlling when a payment will be made based on certain obligations between a seller and a buyer. Therefore, both parties can get what they want and negotiations can stay on track with the help of a mediator, such as, your Omaha real estate agent or escrow professional!
Once real estate escrow is opened by a signed agreement, it is then delivered to an escrow officer, who helps to make all parties satisfied. After that, the escrow process can begin.
The steps in the escrow process are:
- Bank appraisal
- Get financing
- Approve seller’s disclosures
- Do inspections
- Hazards insurance
- Title report & Title insurance
- The final walk-through
- HUD_1 form
- Close escrow
How do you know who to trust?
When it comes to choosing an escrow professional it should be someone uninterested in who comes out on top and be a trusted source that will keep your money safe during the negotiation process. It can be hard to choose a third party to oversee your money when you don’t even know where to start looking.
One way you can choose from the crowd is by asking your real estate agent for a referral. You have to remember this is not your real estate first rodeo! He or she has done this before and they know from personal experience which escrow providers to choose from and which ones to avoid.
Why should you get an escrow account?
As you may already know, escrow is important to have during the homebuying process because it protects both the seller and the buyer. But, something you probably don’t know about your escrow account is it can help you save money! It can also be used to keep homebuyers on budget with taxes and other hidden costs of buying a home.
By having an escrow account, you’ll never have to worry about paying your bills on-time because it’s up to your lender to pay all your bills and taxes!
Although, escrow is not a new term used in real estate, it may be a new term to a person buying their first home. Whether it's your first or fifth home, it doesn’t matter, an escrow account is a helpful tool during the homebuying process.
So, keep your money in a safe place, seek the help of a Omaha real estate agent and let us keep an eye out for the perfect home that money can buy!
For more help on finding out more about real estate escrow, contact The Fairfield Team. We can help you find the perfect escrow professional for your home buying process!