Once you've decided to buy or sell a home, there are a variety of steps involved. One of the most prominent aspects of the process is escrow. To ensure you fully understand this aspect of buying and selling, here's a closer look at escrow fees and what's involved.

What You Need to Know About Escrow Fees

What is escrow?

When buying property, there are large amounts of money being transferred between parties. With escrow, the funds are deposited into one account until all the requirements have been met. The process also includes documents, like a house deed. Typically, the responsibility of operating the account falls to a third-party, like a title agency. 

Why do I need an escrow account?

The process is designed to protect both the buyer and seller during real estate transactions. The escrow holder must verify that every aspect of the contract has been fulfilled, including securing the buyer’s funding and clearing the title, before releasing the money and title. In many cases, it also requires that the seller fixes any agreed-upon changes following the inspection. Such steps are necessary to prevent either party from being taken advantage of. 

What fees are involved?

Escrow fees vary by state and agent and are included in the closing costs of the transaction. Typically, base costs end up totaling around 1-2% of the selling price of the home. There are also costs related to the transferring of funds, office expenses, and any additional services, like title insurance and checks. 

Who pays the fees?

Determining who's responsible for the escrow fees takes place during the contractual aspect of purchasing a property. It's common for buyers and sellers to negotiate the closing costs. In some cases, one party agrees to cover all of the expenses, but commonly, each party absorbs a certain amount of the total costs. For sellers, the expense is typically taken directly out of the property earnings, while buyers are sometimes required to pay out-of-pocket or include the lump cost into their mortgage total.
 

Whether you're ready to sell or buy a house in Cumberland County, TN, turn to Looney & Chadwell Title Services LLC for assistance with the process. From title checks to real estate closings, the reputable title company offers honest, dependable, and affordable services. Learn more about the team and their experience online, and set up an appointment or direct any questions regarding escrow fees to (931) 484-7129.