What are escrow states? and why are they called that? Thank you.?

Question

What are escrow states? and why are they called that? Thank you.

Answer 1

In an Escrow state, you go through an Escrow company to manage money moving between parties and debts incurred during a real estate transaction. Usually your escrow company gets involved a few days before closing, and stay involved for a few weeks after closing.

What the Escrow company does: normally they collect money from the seller and put it in a special account. They then pay last-minute expenses from that fund, like the last water bill on the property, or cleaning (if your purchase contract has a cleaning clause and deposit in it), or an unexpected tax bill. This helps make sure the seller settles all the debts on the house that they incurred and doesn't leave an outstanding balance for the buyer; without an escrow account, the seller would be too tempted to run out and leave the last water bill behind.

So states that mandate escrow as part of closing are called escrow states. In non-escrow states you will have a similar kind of account funded by the seller but it will be handled either by the closing attorney or the title service.

Answer 2

List Of Escrow States

Answer 3

Hi, I think some education for your wife might be in order, from someone other than you, no offense. A third party influence could be helpful, but my expertise is not in marital affairs, even after two of them, LOL. An attorney might be bucks well spent, it should not be hard to find one who invests in real estate. The answer to the question is yes! The rule is, it takes one to buy and two to sell! If you have access to funds to provide certified funds at a closing, you can buy anything you want to. You can put the property in your name only. You can later provide a half interest by quit claim to keep the peace. The only time you may have a problem is when you get a loan to purchase, the lender will require her to sign the note and deed of trust, always, unless you use a Trust or, say a Limited Liability Company (LLC). If you establish a Trust and fund the trust for the purchase, that will work but if you need a loan, the Trust will need to show the ability to pay then loan, and yes you can have a conventional home loan, in the name of the borrower's Trust, but an LLC would be a business loan. I suspect you are requiring a loan as you said escrow documents, I think you mean closing documents. Some states require transactions to be closed in escrow, but this simply is for a third party agent to transfer funds and good title. As is usually the case, if you got enough money you can do what ever you want to, but if there is a loan the lender will require her to sign. Reason is, even if she is not on the deed, she has a marital interest in the property and in the event of a foreclosure the lender will want to foreclose on her as well as you in the event of default. Another reason is for title insurance purposes, as her interest needs to insured over when you pass on the title, that's why it always takes two to sell. You might consider a straw man, a third party to buy it for you and then he quit claims the property to you. You must tell the bank what your arrangement is, otherwise, the lender can call the note due under the Due on Sale Clause. You can co-sign a note by yourself, but if you are a borrower, then she is back in the picture. You might check with other lenders. If you find a "private investor" known by Realtors and closing agents, they can buy the house and you can buy it from them on an installment contract without her signature, or better yet, put your name on the deed with the investor as a partnership after the investor acquires the property. If you know what a quit claim deed is and actually does, conveying only that interest that the grantor has in the property or to the extent of participation, like a half interest, then such a deed may be used, but understand you would not be insured under any title policy from the initial closing, unless you obtained a policy after you acquire it by quit claim. Have you ever considered making mortgages instead of owning the house? If you make a loan to someone who buys the house, you'll receive payments each month and if they don't pay, you can take a deed in lieu of foreclosure by accepting a quit claim deed. You can make someone a loan without your wife signing anything. If you take back a property, she never signs a thing. But even if you acquire a property by foreclosure or a deed in lieu of foreclosure, you will need her to sign when you sell the property. Now I'll talk like an old man, this is really something you and your wife need to get straight. There is some reason she doesn't want to buy a house and that's strange. You really need to find out what the reason is and overcome the problem with her, again, a third party might help. Maybe you're bitting off more than she thinks you can chew, it's a matter of trust and if you are new in a marriage, get some help, because this is something that can lead down the divorce alley, maybe you should talk about that too! Hope you work it out. Maybe my answer is not what you wanted to hear, but that's the way it is! Good Luck! B

Answer 4

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What are escrow states? and why are they called that? Thank you.?
What are escrow states? and why are they called that? Thank you.

Answer 5

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In a community property state such as California, a married person may buy a property in his/her name but the other spouse must sign a quit claim deed indicating they want no part of the transaction. There must be some reason your wife is not interested in real estate investingg. You did not indicate what these reason were. Not knowing this puts a damper on any advice given concerning you doing real estate investin on your own. Lying on a legal document indicating you are a single person when you are married is fraud. This could lead to legal problems down the road along with being arrested for real estate fraud. The best way to do this if you still want to do real estate investing is to form a corporation. You will have to seek help from your tax consultant and others that give you advise you trust. There are several different corporations you may form. Some allow you and the corporation to act as one entity for tax purposes, therefore your wife will be required to be involed because you might be filing your income tax as a married couple plus the corporation. There are others that allow the corporation to be taxed alone and you act as an employee of the corporation and you file taxes on the payments received from the corporation. You should check with your tax consultant as to which is best for you. Forming a corporation and buying property under the corporation's name degates the requirement of your wife to sign for any property owned by the corporation. Keep in mind that if you plan to purchase property through the corporation that it must qualify for a mortgage loan as if it was an individual with the same requirements. Two years of fed income taxes, the ability to repay the mortgage and proof that it can. Assets as well as bank accounts with bank statements to prove the assest exist. You might still purchase a property with the corporation and the corporation even if the corporation does not fully qualify for a mortgage. The lender would require a personal gurantee meaning they would require you to sign both as an executive of the corporation as well as yourself personally guaranting the loan. This is called a recourse loan. If the corporation can qualify on it's own then it would be called a non-recourse loan. I hope this has been of some use to you, good luck. "FIGHT ON"

Answer 6

These are states where they refer to the period between contract acceptance and closing as "Escrow" when you go to the closing you are "going to close Escrow". It is just local terminology.