Vocab

Question 1

Closing

Answer 1

Closing (or settlement) is the final stage of a real estate transaction, in which documents are signed and delivered and funds are transferred

Question 2

Escrow

Answer 2

Escrow is an arrangement in which money and documents are held by a third party on behalf of both buyer and seller.

Question 3

Escrow Agent

Answer 3

An escrow agent is a third party who holds money and documents in trust and carries out the closing process.

Question 4

Escrow Instructions

Answer 4

Escrow instructions are a written document that tells the escrow agent how to proceed and states the conditions that each party must fulfill before the transaction can close.

Question 5

Impound account (aka reserve account)

Answer 5

reserve account for tax and insurance payments

Question 6

Settlement statement

Answer 6

sets forth all the financial aspects of a real estate transaction in detail.

• During closing, the escrow agent or the lender prepares this
• The statement also indicates how much cash each party will be required to pay or will receive at closing.

Question 7

Debit

Answer 7

A debit is a charge payable by a party.

Question 8

Credit

Answer 8

A credit is a charge payable TO a party.

Question 9

Reserve Account

Answer 9

contains funds on deposit with a lender to pay property taxes and insurance premiums when due.

AKA impound account