Escrow Services

An escrow is an arrangement in which a neutral third party holds onto legal documents and funds on behalf of a buyer and seller and distributes them following the buyer's and seller's instructions.

Opening an escrow can be a source of convenience and protection for someone buying or selling real estate. Both buyer's and seller's can move forward together or separately in providing inspections, reports, loan commitments and fund, deeds and many other items using the escrow holder as the central depositing point. The escrow holder can take many actions on their behalf to help facilitate the close of a transaction.

New Construction:

East Coast Closing & Title will open an escrow account for the full amount needed to complete the project. Instead of paying all of the money out at the closing, the money is paid out periodically, as needed. These periodic payments, called draws, are a series of checkpoints for the lender and borrowers to monitor the construction progress. Before the construction begins, the builder gives East Coast Closing & Title a cost breakdown of the project – sort or a road map for the title company to follow. The cost of work is listed by categories, such as excavation, plumbing, and rough finish carpentry. Each sub-contract and supplier is listed, along with the amount that each will be paid. At specific points in the project, the builder and the borrower give a draw request to the lender and to the title company. This lists the money needed for work completed to that point. The title company orders an inspection for the property to determine if the work shown on the draw request actually appears to have been competed. Assuming that the inspector agrees that the project is on track, the title company then processes the draw request and asks the lender for the draw money. The lender forwards the requested funds to the title company. The title company pays the general contractor, sub contractors and material suppliers the amounts specified in the draw request. As each party is paid, they give the title company a lien waiver. Until a contractor or supplier is paid for their work and materials, they have a legal right to file a lien against the property. By giving the lien waiver, the contractor acknowledges that they will not file a lien for the work shown on the waiver. The title company then insures the lender that the draws have been paid to the parties shown on the request. When the project is completed, the general contractor gives the title company an affidavit of completion and final lien waivers from all sub-contractors and material suppliers. The final inspection is performed to determine that all work is finished. In most communities, an occupancy permit is issued by the local building authorities. When all this is done, the lender will pay out the balance of the escrow monies, and the homeowner will move in and begin decorating there brand new home.