Escrows and home purchases
When Florida residents plan to purchase homes, they will have their down payments held in escrow until the transaction closes. Escrow involves holding down payments and handling the other money aspects of the transactions. Escrow companies or other independent parties receive the loan proceeds from the lenders and pay those funds and the down payments to the sellers. They also are responsible for transferring and recording the deeds of the property.
When the purchase agreements are being negotiated, the sellers and buyers will normally choose the escrow agent or company that will handle the assorted tasks. The parties may draft instructions for the escrow agent. The buyers then pay the escrow agent their earnest money, and the agent will be given copies of the purchase agreements and other paperwork.
After the earnest money has been transferred to the escrow agents, the buyers then work with their lenders to finalize their mortgages. This may involve getting home inspections, homeowners’ insurance, title reports, title insurance and conducting comparisons of the good faith estimates with the final mortgage offers. Finally, the buyers will complete walkthroughs before proceeding to the closings. The escrow agents will receive the funds from the mortgage companies and transfer the funds at the closings.
For most people, purchasing residential real estate may be the largest financial transactions that they ever complete in their lives. Because of the complexities of these transactions, people might want to get help from real estate attorneys who can negotiate the terms of the purchase agreements to make them more beneficial to their clients. They may also complete title searches and draft any remaining documents that are necessary to close the transaction.