OT: stupid question, Escrow? |
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OT: stupid question, Escrow? |
SirAndy |
May 23 2008, 05:25 PM
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#1
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Resident German Group: Admin Posts: 41,813 Joined: 21-January 03 From: Oakland, Kalifornia Member No.: 179 Region Association: Northern California |
How exactly does Escrow work? (IMG:style_emoticons/default/idea.gif) from what i gather, the escrow company is kinda like a Notary with a Bank and i put in the funds and they'll hold them until certain terms in the sales contract are fulfilled and then release the funds to the seller ... am i close? (IMG:style_emoticons/default/shades.gif) Andy |
HeavyHeavy |
May 23 2008, 05:36 PM
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#2
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Member Group: Members Posts: 62 Joined: 7-June 06 From: Albuquerque Member No.: 6,177 |
More or less. It depends a little on the context.
Let's say you purchase a house on a real estate contract (as opposed to a normal closing where you would receive a deed right away). In a deal like that, the owner of the property holds the note and is still on the hook for paying that while the buyer on the real estate contract takes possession and makes payments - usually to an escrow company. It is the duty of the escrow company to accept the monthly payments and either put it toward the owner's mortgage or pay the owner so he can do it. The escrow company is basically a disinterested third party that makes sure both sides are getting a fair shake. In the example of the real estate contract, the escrow company holds a warranty deed and a special warranty deed. If the buyer pays off the real estate contract, the escrow company will make sure that the warranty deed from the seller to the buyer gets recorded at the county clerk's office. If the buyer defaults, the escrow company records the special warranty deed from the buyer back to the seller. An escrow officer usually works at a title company and not an escrow company (at least here that's how it works). The job of an escrow officer is to do the closing, but is still just a disinterested third party that makes sure everyone involved in the transaction gets a fair shake. Jamie |
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