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What is “Escrow”? And Other Updates

Pennie and PCA Realtor Boniface Davay on this week’s Pennie Sense

CURRENT MARKET UPDATE

The Des Moines market continues to trend in the 2,400-2,600 range, which is still on the lower end of balanced, but better than we have seen over the past few years at this time. Additionally, mortgage rates are heading in a good direction. Real Estate activity tends to plateau in June, with school being out and the Iowa State Fair coming up, but it is always a good time to consider investing.

If you are on the fence about buying or selling, there is no time like the present! See what your home is worth, talk to a trusted Real Estate agent or lender, and discuss your options. Buying is a great form of long-term investing, and this seller’s market will only last for so long. Now is great time, whether you want to buy, sell, or both!

WHAT IS AN ESCROW ACCOUNT?

As Boniface discusses above, escrow accounts can be confusing to an observer. We’re here to help! “Escrow” can mean a few different things, but it has two main meanings in the realm of Real Estate.

First, escrow or “in escrow” in the process of closing a house means that a small amount of “good faith” money has been into a third-party holding account. This account hold that money until both parties fulfill their obligations, like the appraisal, title search, and financing. This gives both the buyer and seller assurance throughout the transaction.

Second, an escrow account can be set up at the time of closing on a home. “In this instance, the escrow account contains future homeowners insurance and property tax payments.” (Investopedia / Zillow) A portion of the homeowner’s mortgage payment goes into this third party account each month to help cover home-related expenses, like taxes and insurance. You may have a higher monthly payment, but you will not have to worry about making those other payments as well.

Watch the video above or talk to your Real Estate agent to help you better understand the closing process or escrow!

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