Definition of Escrow

Escrow is a process that creates a smooth transfer of money and property for large purchases, especially real estate. It is also the word that refers to the account in which money is held while all sales paperwork is taken care of. It begins, or opens, when the buyer and seller sign a sales contract and/or receipt of deposit and guides the escrow process. It ensures that the sales process is handled fairly and that all documents and funds are in order before the property changes hands.

A neutral third party is required when depositing funds and documents into an escrow account. In this way, it is guaranteed that money will be made available at the same time as the property deed is update to reflect new ownership. This third party may be chosen by the seller or the buyer and only regional custom determines who chooses and who pays the costs of this person’s services.

An escrow officer or a title or escrow attorney makes up this third party agent.

An escrow officer or attorney is a key part of this transaction and finding the right one is as important as finding the right real estate agent. The third party supervising escrow will collect a commission for his or her services, usually about 1 – 2% of the cost of the home. It’s a good idea to get referrals from friends or family who have sold or bought homes and to check services fees for different escrow agents.

The contract and escrow instructions generally contain requirements for home insurance, financing, flood insurance, home inspections, repairs and other tasks either the buyer or seller must complete before the transaction can move forward. Each time one of these requirements are met, the buyer or seller signs off with a contingency release form; this form is then forwarded to all parties involved, including the escrow officer.

A preliminary title is drawn up, pointing out any and all claims against the property. The title company will check a final time and produce a report to be sure existing claims have been removed and that no claims have been made since escrow was opened. There is only some paperwork to complete and sign before the property is sold.

Escrow is finally closed when a new deed is drawn up in the buyer’s name, the money is paid to the seller, and all other fees are closed and addressed.

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10 Facts About Escrow

1. Not every state has the same laws and requirements for escrow. Some states only allow attorneys to handle escrow while others only require a licensed company or agent.
2. Many title companies operate under different requirements set by the Department of Insurance than individual agents or small escrow companies. Especially when these are large businesses that operate across many states. Be sure to check your state and local laws regarding escrow professionals.
3. Most escrow forms will have to be notarized. There are some exceptions but notarizing documents is a good rule of thumb. Your escrow professional should be able to identify which documents will require notarization.
4. Escrow instructions should specify in writing how and under what conditions money will be disbursed, especially if the escrow doesn’t close and the property’s sale falls through. Money generally cannot be distributed unless there are written instructions.
5. If no agreement can be reached about how to distribute the money leftover after a failed sale and the escrow date has passed, the escrow agent may file an interpleader. This is a document which names all the parties that might have an interest in the money and asks a court to decide how to disburse the money. Otherwise, an escrow agent may be obligated to keep funds indefinitely.
6. Whether you are buying or selling, insurance is a must. Home owners’ and title insurance are important. The escrow process is complicated and puts a lot of money on the line. Talk to your real estate agent about your insurance needs.
7. Complete all contingencies, inspections, and walkthroughs as early as possible. This includes building inspection, pest control, and clearing all liens on the property. Any delays can hold up the escrow process.
8. Did you know that the word “Escrow” comes from the old French word “escroe,” meaning a scrap or a roll of parchment? That’s pretty appropriate considering the terms of holding funds in escrow would be documented in writing.
9. Referral discounts are illegal in the escrow business. If an escrow agent offers commission to real estate agents or lenders for referring clients to them, they are breaking the law.
10. An escrow agent, lender, or real estate agent cannot provide you with any legal advice whatsoever. The escrow process should go smoothly but if there are potential complications like inheritance or a large number of liens on the property, it is advisable to seek a lawyer who specializes in escrow or property law.

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Working with Orange County Escrow

When you want to work with Orange County Escrow then you want to find out what they are able to do for you and everything that you can get out of their services. The price should matter some, but their services should matter the most. This is because you want to ensure that you’re getting the best deal when it comes down to it. You shouldn’t have to worry about the safety of your escrow if you choose the right company to cover you in this area. Escrow is important which means that you need a good company to provide this sort of help.
With the right Orange County Escrow service, they should be able to walk you through the entire process in order to get you the help you need. You should understand everything that they are telling you about what they are going to do during the process and what they are going to need from you at the same time. This is always a good thing if you’re confused on how the whole escrow process works. You want them to be behind you every step of the way during the process.
Orange County Escrow can be there to close out the escrow. With the right kind of experience, they should not take very long to close out the escrow that you have in your account. They will probably need some information from you, and also might want you to sign papers and go through the process with you since they will need some information from you along the way. This can provide you with what you need, while hiring them for the job that they are able to do.
Any type of escrow is something that they are able to do since they specialize in all types of escrow out there. You want to speak with them about their experience in the industry, while also thinking about the banks and extras that they work with. Depending on the market stats out there for the specific time that you need this escrow released then you might be looking at a certain amount of time but they will let you know how long they are looking at and if it might take more or less work in order to close the escrow that you have in your property.

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REO Process

The acronym REO stands for “Real Estate Owned” and that is exactly what it is, a real estate owned property by lenders, bank, and other agencies, many of which have a large inventory of these properties, typically as a result of foreclosure.
When homeowners struggle to make their mortgage payments, may eventually get behind.  When the property is 90 days delinquent, they are put in a distress status and the lender as the beneficiary, will have to decide what they are going to do with the property. The first step is determining how much equity the borrower has in the home, and that is often done by an appraisal.  The lender has the right to allow the borrow to sell the property through a short sale, and if that is not allowed, foreclosure proceeding will commence, and the property will become and REO property.
The beneficiary of the property begins the process of trying to sell the property either on their own, or they may consult and retain the services of an REO asset manager.  Prior to trying to sell the property, the beneficiary will need to remove the liens and debts on the home prior to reselling it to the public.  Resell of the property occurs either through auction, direct marketing through a broker or by itself.  There are many real estate investors who want to purchase the real estate owned properties because there are many discounts offered that will ultimately help reimburse for the neglect or poor condition of the property.
Larger banks, agencies and governmental institutions have REO departments that will handle all the bids, offers and sales of properties.  Real estate owned properties are a loss to the lender, and the longer they have them, the more money they lose.  Unfortunately, in the recent economically strained times, many foreclosures have occurred leaving lenders with a large portfolio of homes. There are many benefits to purchasing an REO property, especially for the first time homebuyers.  A first time homebuyer can get a very nice house at an affordable price, however, the drawback, they may not get the home they have wanted.
When people by REO properties, they may be damaged, or trashed, and the homebuyer may have to put a lot of money into their new home.  Often, when homeowners get behind on their payments and go into foreclosure, they forgo all responsibility of up keeping the home, often even abandoning the property.  However, the property may be in good enough condition that minimal work is required.
The REO process is not a difficult process however, it is a common practice.

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Orange County Escrow Prominent Escrow

When people buy a home, the process is often an arduous process, from the initial stages of looking for a home, to finally signing that last paper and entering the moving phase.  Buying a home is exciting but at the same time it is also stressful.  The exciting part of buying a home is shopping for the house, and if you are looking at new developments, there are many options that must be considered.  If you are buying an existing home, you can do a lot of fixing it up, and making it perfect to meet all your needs.  Yes, that is definitely the exciting part of buying a home, and having an efficient realtor will help you find the perfect home.
The more stressful part of buying a home the financing of a loan because most people do not have money to purchase a house outright and need a home loan to make the sale happen.  Making sure you have a lender that is on top of everything, responsive and pushing to get your loan complete is important.  Once an offer is made, escrow begins, and it is up to the escrow company to keep the process moving in order for a fast and smooth closing.
An efficient escrow company will provide lenders, brokers and realtors with fast and timely escrow services. Orange county escrow provides escrow service that allows a seamless transaction without delays taking away the waiting and anxiety for all parties involved.  An escrow company will handle all the document handling and open the escrow where funds are deposited until the loan closes. Orange County Escrow will handle all the documentation of the loan.  This is a vital part of the loan, and the escrow company is what keeps the process moving. The escrow officer will also conduct a title research to make sure there are no liens, lawsuits or mortgages are on the property.  The title company will coordinate the closing of the loan by gathering all the loan documentation and preparing the escrow statement.  Once the settlement statement is signed by all parties, Orange County Escrow issues the payment or check to the seller.
A good escrow company like Orange County Escrow will offer volume or quantity discounts, in addition to providing competitive rates.  Orange County Escrow will also work hard to eliminate junk fees, making more lenders, brokers and realtors want to work with them for all their closings.


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Orange County Escrow

For transactions like the sale of a home or other property, it’s always wise to make sure the funds and/or property documents aren’t exchanged before the terms of the transaction are fulfilled. This ensures that the transaction itself happens without any further issues that may arise from the displacement of funds and/or important documents.


Escrow is the process of assigning a trusted third party with funds and/or important documents. In cases where a large amount of funds and/or high value property gets exchanged, an escrow ensures the receiving party receives their assigned funds or commodities without issues.


In high traffic real estate markets like Orange County, escrow is necessary to facilitate the exchange of funds between two parties. People are always purchasing and facilitating transactions between sellers and lenders in the region, which makes Orange County escrow companies a necessary part in helping all parties.


The third party in an escrow transaction can be chosen from an Orange County escrow company, a professional from a title company or a professional from both. When choosing an Orange County escrow officer, it’s advised to choose a professional who has referrals from other parties. Sometimes, an escrow officer may require additional costs, which typically cost about 1 to 2 percent of the cost of home.


Both parties involved with the transaction select an appropriate third party to handle the escrow account. The escrow opens once buyer and seller sign a sales contract, usually called a real estate purchase agreement and/or receipt of deposit. It’s this contract that serves as a guideline or set of instructions for the third party, also known as an escrow officer.


In real estate transactions, escrows ensure the funds from a property related purchase are released by the lender around or at the same time that the real estate agreement is finalized between parties. When involved with an escrow transaction, the parties involved are advised to follow and understand the terms of their escrow transaction. Escrow officers are also there to explain the terms of the escrow if one or both parties need clarification.


The escrow process generally opens once an escrow officer assigns the escrow an account number, collects the contract and fulfills other instructions for the transaction. The buyer’s deposit is also collected, in addition to any documents needed to facilitate the process.


The closing process occurs once the seller gets their payment for the property in question, the buyer receives a new deed from the escrow office and other funds are disbursed.


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Escrow- What is it

An escrow is known as an arrangement made under a written agreement by two parties making a transaction. The process usually entails a trusted and independent third party receiving funds and/or documents for the transaction, which they later release to the receiving party. Escrow is also known as a financial account where a broker hold funds for the receiving party, until the terms of their transaction are fulfilled.


Escrow is basically the money held by a third party until the transacting parties complete the terms of their agreement. They’re commonly used in transactions between two parties that require compensation for a service. Their most notable use, however, is in real estate, where money held between two parties is stored in an escrow.


The money in the escrow account is kept separate from a mortgage account, so the funds within the escrow can be used for the payment of the mortgage’s corresponding conditions like property taxes and insurance. Mortgage lenders generally set up escrows to make sure their homeowner clients pay property tax before finalizing their transaction.


Escrows are necessary for one reason: ensuring that funds and/or property involved with a transaction don’t change hands before the terms of the arrangement are completed. The escrow holder or third party has the obligation to hold funds and/or documents while the transaction takes place.


Both parties involved with the escrow transaction choose the third party as the escrow holder. It’s often recommended to choose an escrow holder who has experience handling escrow brokerage while not charging any referral and/or service fees of any kind.


The main duties of an escrow holder is following their instructions provided by the transacting parties, which usually includes handling the funds and/or documents in accordance with the terms of the agreement, complying with requests from the transacting parties and closing the escrow once the terms of the arrangement are met.


Escrows ensure that both transacting parties have a fair and evenhanded transfer of the funds and/or documents involved with a transaction. It’s especially necessary when exchanging funds and/or property during a transaction for a new home. Home purchases need to happen as smoothly as possible, so escrow ensures that the exchange of real estate funds isn’t prolonged by problems or issues with buyer, lender and/or seller.


Escrow, as mentioned, is also handy in transactions between parties who are agreeing to a service. However, since real estate requires funds and/or documents to be handled carefully, escrow is a necessity in that industry.



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Existing Home Prices Increase

According to the latest quarterly report just released by the National Association of Realtors® (NAR), which reflects data from the fourth quarter of 2012; national median prices for existing-homes had the strongest year-over-year gain in seven years.

NAR data shows that the national median price for existing single-family homes during the last quarter of 2012 was $178,900; this is an increase of 10.0 percent over the fourth quarter of 2011 when prices were $162,600.  The 10.0 percent gain is the strongest price increase since the fourth quarter of 2005 when the median price surged by 13.6 percent.  The fourth quarter increase was also a 1.2 percent rise above the preceding third quarter when prices rose by 8.8 percent.

The NAR explains that the “median price is where half of the homes sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions.”

The national median price gain for individual existing-homes is also reflected in the fact that most of the overall number of metropolitan housing markets also saw price increases as well.  The median existing single-family home price rose in 133 out of 152 metropolitan statistical areas (MSAs).  This data is based on closings in the fourth quarter and is compared to the same period one year earlier when only 29 metro areas saw prices increase.
The fourth quarter metro gain was also an increase over third quarter 2012 figures when 120 metro areas saw increases.  Only 19 metro areas had price declines in the fourth quarter 2012.
One of the contributing factors to the price gains is a shrinking market share of lower priced homes says the NAR.  In addition, Lawrence Yun, NAR chief economist states that, “all the conditions for strong price growth are at play…home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years…[and] home sales are being fueled by a pent-up demand.”

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Home Sales Increase

According to the latest data from the Commerce Department, sales of new single-family homes registered their first annual gain in seven years.  In addition, information from the National Association of Realtors® (NAR), reveals that sales of existing homes saw year-over-year quarterly gains ending the year on a positive note.
The Commerce Department report states that new home sales for 2012 jumped 20 percent over new home sales in 2011.  Though this is encouraging news indicating that new-home sales may now also have turned the corner on market gains, in reality sales for 2012 were the third lowest on record.
Sales of new homes during the two preceding years, 2010 and 2011, were also at record lows.  Final sales figures for all of 2012 show that 367,000 new homes were sold for the year.  This is about one-third of the record number of sales reached in 2005.
New-home sales for the month of December actually dropped 7.3 percent compared to the previous month to a seasonally adjusted annual rate of 369,000 units.  November sales were revised upwards to 398,000 units, which was the highest sales pace in three years.
The median price of new homes increased to $248,900 in December; this was a 1.3 percent increase compared to November. The median price of new homes that sold increased 9.6 percent in December over the same period a year earlier.
According to the NAR, total existing-home sales for the fourth quarter of 2012 were 4.90 million units on a seasonally adjusted annual rate; this was a 12.1 percent gain over the same fourth quarter period in 2011 when 4.37 million units were sold.  Sales for the fourth quarter 2012 were at the highest level since the fourth quarter of 2009 when sales reached 4.95 million units.
Sales for the fourth quarter last year also were 5.0 percent high than sales during the third quarter when 4.66 million units were sold.

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Housing Affordability Record

The final report from the National Association of Realtors® (NAR) shows record high housing affordability conditions for metropolitan real estate markets nationally in 2012.

The NAR presents the affordability data in its annual national Housing Affordability Index (HAI).  According to the NAR, the index is “is calculated on the relationship between median home price, median family income and average effective mortgage interest rate.”   Record keeping for this index began in 1970, and as the index increases it reflects a stronger household home purchasing power.

An index rating of 100 is defined by the NAR as the point at which a median-income household has exactly enough income to qualify for the purchase of a median priced home.  This assuming that no more than 25 percent of the gross income is used for mortgage principal and interest payments, and also assuming a 20 percent down payment.

The NAR Housing Affordability Index for 2012 was listed at 193.5; this is up from an affordability index of 186.4 in 2011.  The 2012 index was a new record.  For buyers not making the 25 percent of gross income and 20 percent down payment markers, their affordability levels will be lower.

NAR chief economist, Lawrence Yun, says that the index for 2012 shows that “the national median income of families was almost double the income needed to buy a median-priced home in 2012.”  He goes on to say that this enables most buyers to easily stay within their financial budget for a home purchase.  He projects that the index will average 161 throughout 2013, making home purchase affordability “very favorable.”  If his projections hold true, he says it will be the third best on record.

According to the NAR, There were 145 out of 156 metros that set records for housing affordability in 2012.

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