What You Should Know About Escrow
Escrow means you’re using a “third-party” (neither the buyer nor seller) to hold something of value, which makes your transaction safer. Our job as an escrow service company is to ensure everyone sticks the bargain and we facilitate the agreed upon contract details while also safeguarding the assets involved in the process.
Escrow opens when a signed agreement is delivered to an escrow agent. There are usually two closings: one at the time of signing the bond for deed contract, and one when the title and ownership transfers. After the details are outlined to an escrow agent for service in a contract, the buyer and seller simply need to do what they agreed to do.
Why You Need an Escrow Account
When you make your monthly house payments for your bond for deed contract, you probably pay for more than just your mortgage. Expenses such as homeowner’s insurance and property taxes are likely included as well. Sellers aren’t always confident that buyers will budget for those extra expenses properly, and if you miss those payments, the seller is at risk. That’s why ensuring that those expenses get paid is often a part of your monthly house payment called Escrow or Taxes and Insurance (T&I).
With an escrow account, the monthly portion for those extra expenses is deposited into a separate account. Each year, when your insurance or tax bills are due, the money in that account pays the bills. To make matters even more convenient, we handle this for you as your escrow agent.