What the Escrow Process Means to Home Buyers

If it's your first time to buy a home, you're probably looking over the usual home buying process and have probably come across the term "escrow" several times. Going to escrow protects your interests as much as it protects the interest of the seller.

Let's say for example that you want to buy Mount Vernon real estate. As you look through Mount Vernon homes for sale, you made an offer on a piece of property that you want to buy. From this point on, you'll start investing money on the house by going through the home buying process. Here's a brief overview of what you can expect to do, including the escrow account:

Open Escrow.
When purchase agreement exchanges hands, you should deposit the earnest money you offered into an escrow account. This means that the escrow manager holds the check for the earnest money and will only hand it over to the seller once the conditions of purchasing have been met or once it's legally the seller's to have. This way, there will be less issues on how the money has been used. The earnest money will be added to the down payment, which you will also pay out of pocket. Should you be the one who doesn't hold up to the end of the bargain, the seller will most probably get the earnest money as payment for time spent negotiating with you, so it's fair on both sides.

The lender will appraise the property.
In order for you to secure a final amount on the financing you'll get for the house, the lender will send somebody to appraise the house you want to buy. If for example you want to buy the Mount Vernon real estate which is listed at a specific price, the appraiser will determine the value of the house and make the recommendation to the lender on how much you should borrow. Let's say that the list price is $300,000, if the appraiser values the property at only $200,000, that's the only loanable amount you'll get from the lender.

Complete home inspections.
There are several different types of recommended home inspections which you should not skip or skimp on. Houses all have their own issues but it's very important that you take the necessary precautions by making sure the house you buy doesn't have serious issues like a broken roof, mold, toxic substances, pest infestation, compromised foundation, and the likes.

Get the title inspected.
Getting title insurance is actually a required step, and you'll be happy that it is once you realize what it's for. Checking the title is a laborious and long process which aims to reveal if the title has clouds, liens, or anything of the like. This makes sure that the property that you purchased is yours alone and nobody else is entitled to make a claim on it in the future.

Close escrow.
Monday and important documents will change hands by the help of the escrow manager. On your part, make sure that you read everything that you sign, even if there will inevitably be a lot of things to read.

Minnie Baron is a freelance writer who specializes in writing content about real estate, business and investment. Check out great Mount Vernon homes for sale and Mount Vernon real estate listings.