Mortgages Made Simple with Rick Gundzik

Monday, July 18, 2005
I'm in Escrow! What are they talking about?
'I'm in Escrow!' Sometimes you hear this phrase at a cocktail party (Ok, those went away in the 60's, but it sounds trendy) and wonder, 'Hmmm, They're in escrow, I hope it doesn't hurt, can they get out of escrow?, if so when can they get out?'

Well, sometimes escrow is painful and if you're a seller you can't get out. Let's look at escrow from the viewpont of a seller, next time we'll take the buyer's viewpont.

As a seller, you've decided to sell your home. You call your aunt who has friend whose grandmother's cousin has a niece that sells real estate. So you list your home with her. If she is the average real estate agent, she may sell as many as 8 homes per year. Wow!! Genuflect in her direction. The reality is she probably sells less. Therefore, she has NO experience.

RULE #1 Work with an experienced agent or one that has a fantastic staff behind them. Everybody has to start somewhere, but if they're low on experience ask them what kind of experience their staff has.

Ok, assuming everything goes well and you accept an offer for your house, the transaction is now in escrow. The purchase contract is given to an escrow company or Attorney, depending on the state you are in, and they open escrow.

Escrow is nothing more than an independent 3rd party who makes sure your money goes to the right place. They make sure your mortgage is paid off, the title to the property is transferred to the buyer's properly and ensure you receive your money. As mentioned before, depending on your state either an escrow company, title company or attorney handles these functions.

Do not be afraid to call the Escrow officer, title officer or attrorney's office, they are working for you. Also, due to the sheer volume of transactions they perform they have a great deal of experience. Keep in mind they can't give you legal advice, but they can generally help you out.

RULE #2 Understand the offer. As a seller you can not back out of the deal, so be sure you are satisfied with the offer. If you are unsure of anything ask your real estate agent. Also, be sure the place you are moving to will be ready and you are approved for your new mortgage. We've rescued more than a few sellers who couldn't get their loan approved at the last minute. Which brings us to the next rule.

RULE #3 Get your loan approved in advance. It is very important to know if you'll qualify for the new home you're buying. Just because you sold your home for more than you ever thought possible doesn't mean everything will be fine.

If you need help or have any questions, email us at questions@pacificresidential.com
posted by Pac Res @ 3:45 PM  
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