What to Expect During Escrow

Posted by admin on October 25, 2012

After researching land and property for sale and finding the perfect property, you will place an offer. If that offer is accepted by the seller, you won’t become the property owner quite yet, but you will be one step further in the process. Once you have reached this stage, you will enter closing, which is where legal transfer of property occurs between the seller and the buyer, typically taking about one month for contracts to be signed and finalized.

In the western half of the United States, closing usually takes place in escrow. Escrow differs from settlement, which is typically used in the east, as it doesn’t require the buyer and seller to meet. This is beneficial, especially in cases where things go awry, and helps to maintain order. A neutral third party, the escrow holder, will distributes funds and documents on a buyer and seller’s behalf, and will facilitate the closing. The buyer and seller will give the escrow holders specific instructions and they will see these through or come back if the instructions cannot be fulfilled, in which case an alternative strategy can be discussed. Using a third party provides buyers and sellers with both protection and convenience.

During the escrow process of land and property for sale, you will learn about the closing costs. Closing costs cover the services for transfer of property, and usually total somewhere between 1 to 2 percent of the purchase price of the property. These costs include the following services:

Mortgage Costs: loan origination fee, commitment fee, underwriting fee and document preparation

Outside Vendor Costs: appraisal, credit report and flood determination fee

Title Costs: settlement fee, title insurance premium, title search and plat drawing

Government Fees:  mortgage registration tax and title recording fees

You will also incur a 1 to 2 percent cost for pre-paid items, which include real estate taxes, for the first year of property ownership.

At closing, both buyers and sellers will need to have photo ID, such as a driver’s license or passport, to officially purchase land and property for sale.

After the seller transfers the deed to the buyer and receives the specified payment for the property, keys will be delivered and the deed will be registered by a title company at the local land registry office. After this final step, the buyer will legally become the property owner and can enjoy the rights to that property. If you are interested in land and property for sale, visit AllAcres.com to browse listings of affordable property in your desired area. Call AllAcres at (855) 227-3741 or contact us online to locate affordable land and property for sale.