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rle 81 and chp 13
An escrow in real estate is an account in a secure area where useful items such as contracts and earnest money checks are kept. The items are safely kept by the company until the escrow deal is closed, and the holding area changes strategies. A third party, usually the escrow officer, ensures that documents and money are maintained until the deal is over, and escrow closes (Schaeffer et al. 5). The third-party ensures that transactions of money transfers and documents proceed smoothly. Escrow protects relevant parties, for example, home buyer, seller, and lender, by making sure that no funds from a company or lender change hands till the escrow agreements are adhered to. The buyer or seller accomplishes contingencies tasks such as repairs, home inspection, and mortgage approval. Once the steps are completed, the seller or buyer signs a release form with a contingency, and the transaction proceeds to the proceeding step. After meeting all necessary conditions and finalizing the transactions, the buyer submits the closing costs and money due to the seller’s disbursement. The escrow manager records the title, and finally, the buyer is entitled to own the home.
During the escrow process, a buyer is expected to meet certain conditions to own the house. I will inform the buyer that he needs first to open an escrow account. After collecting the funds, the buyer is bound to wait for the bank’s appraisal (Schaeffer et al. 5). The buyer would then secure financing from a mortgage. He will be expected to approve disclosures from the seller. The buyer would require to obtain the necessary inspections regarding the environment, pest inspection, and geologic report. He is expected to provide hazard insurance, which varies with banks to choose from a bank of his choice. He would provide title insurance and report to his lender. When all this is done, the escrow closes and owns the home rightfully. However, if the buyer fails to close the escrow within the stipulated timeframe, the seller may cancel escrow and goes ahead to have the earnest deposit retained. During the escrow process, the buyer may cancel the escrow through the buyer’s deposit may be at risk. Besides, if the contract has to be canceled, it will need the seller and buyers agreement on the earnest money deposit.
Work Cited
Schaeffer, Donna M., and Patrick C. Olson. “Securing Confidence With Data Escrow.” International Journal of Management & Information Systems (IJMIS) 22.2 (2018): 1-6.