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Escrow 101

 Matt Berrang, INI Realty Investments, Inc. can walk you through closing - (904) 343-1818
Let's talk about "escrow". An escrow agent is used to assure your place closes on time and the process goes smoothly. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to think of what an escrow company does is to think of the use of PayPal for Internet purchases.


The escrow company is careful to assure that all terms and conditions of the seller's and buyer's contract are performed prior to the sale being finalized. This includes getting payments and paperwork, signing required forms, and getting the release documents for any loans or liens that were cleared with the transaction, assuring you have a free title to your home before the negotiated price is fully paid.

The records the escrow holder may secure include:

  • Fire and other insurance policies
  • Title insurance policies
  • Terms of sale and any seller-assisted financing
  • Requests for payment for various services to be paid out of escrow funds
  • Loan documents
  • Tax statements

Upon finishing of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the property and the title insurance gets issued as stated in the escrow instructions.

The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Request title research
  • Meet lender's guidelines as noted in the escrow agreement
  • Receive funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse monies and finish instructions
  • Give advice - the escrow company stays a neutral, third-party status
  • Dispense opinions about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay on-going expenses while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

Once you're comfortable with the escrow process, you can be a confident buyer.