How Does Escrow Work?

Escrow is the signing of documents, legal recording, and distributing of money during the close of a real estate transaction. At the time of closing ownership of the property is transferred, title insurance is issued and coverage begins.

There are certain fees involved in closing on a piece of property. Depending on state and local laws, you may have to pay:

title costs (title search)
owner's or lender’s title insurance
and your own title insurance

Title Costs	These are controlled by state regulators and set by the underwriter
	Prices are set based on a percentage of the cost of the property and/or loan.
	Re-issue credits are available for anyone who has had title work done within the last two years.
Settlement fees	These are costs for the escrow closing usually handled through a title or escrow company.
	Escrow fees are controlled by state regulators and can only be negotiated if they are over $1000.00
Loan charges	include origination, appraisal and survey fees
Taxes and government fees	transfer taxes, buyer’s share of yearly property taxes

Note: Before you authorize the final closing you should review the HUD-1 Settlement or Closing Statement, which provides an itemized list of all closing costs. Be sure you understand them. This is your chance to verify fees, check procedures and terms, and ask any questions.