Legal Question in Real Estate Law in Illinois

Escrow Account When selling your Home

What happens to your escrow account when you sell your house? From our escrow account we take out PMI, Property Taxes, and Insurance. Right now we have a shortage in our escrow account for this year and we have decided to make it up of the next 12 months. We had a jump in property taxes and did not have enough in our account to cover the increase. The problem is we are selling our house. How will this affect us when we go to sell our house in the next couple of months?


Asked on 3/29/06, 8:22 am

2 Answers from Attorneys
Thomas Moens Moens Law Offices, Chartered

Re: Escrow Account When selling your Home

Generally, if there is a shortage in your escrow account, that amount is added to the payoff. In other words, say you owe the bank $100,000, and your escrow is short $1,000. The mortgage payoff on your settlement statement will be $110,000. On the other hand, when you have an escrow balance, lenders will send it to you within thirty days of their receipt of the payoff.

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Answered on 3/30/06, 8:53 am
George Zuganelis Zuganelis & Zuganelis, Attorneys at Law, P.C.

Re: Escrow Account When selling your Home

The title company and the lawyers will do the computation at the closing. Usually, you would have to bring current the back taxes, and the amount owed for the year up to closing. The title company usually gives a credit to the buyer for 110% of the tax owed to date. That's to cover any increase in taxes. When you have a contract, please call for an appointment. Thank you.

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Answered on 3/29/06, 9:42 am


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