The term "escrow" means any agreement between two or more parties (principals) wherein the delivery of instruments, monies, items of value, or evidence of title to real or personal property are deposited with a 'NEUTRAL' third party, (the escrow agent). This agreement contains specific written instructions executed by all parties to the transaction.

Other parties may be brought into the escrow by virtue of the instructions and requirements of the buyer and seller, i.e., the lender, lien holders, contract vendors, etc. In order for the seller and buyer to complete the transaction it may be necessary to receive money and documents from these other parties. These other parties will deposit their items of value into the escrow along with their written instructions which confines the items to the escrow until their conditions have been met.

The escrow fee is usually split between the buyer and seller but this can be changed by an agreement of the parties.

Our tax year is July 1^st through June 30^th. The bills come out at the end of October and are due by November 15^th for the 3% discount. Taxes can be paid in thirds with no penalty. Interest is due on the unpaid taxes at 1 1/3% per month an the 16^th of each month. The county, at it's option, may start foreclosure proceedings with three years of unpaid taxes. If a property has gone into tax foreclosure there will be an additional penalty due.

Seller is responsible for taxes from July 1^st to closing and the buyer is responsible for taxes from closing through June 30^th. Reserves/Impounds are collected by the Lender to pay taxes for the following year. To estimate a dollar amount needed for reserves: divide the current tax bill by 12 to get a monthly tax amount; count the number of months from the buyer's first payment due date to October; now subtract that figure from 12 and you will have the number of months that will need to be collected; multiply that number by the estimated monthly tax amount; the resulting total will be the total estimated dollar figure for tax reserves.

For additional information please contact Linda McGettigan or Marsha Elam, our Tri-County Escrow Managers, at (503) 244-8323 and (503) 219-8755 respectively.