Have you ever heard two different meanings of “escrow” and wondered which one applies to your closing? You are not alone. If you are buying in Monroe County, you will encounter escrow more than once, and it will affect your timeline and your cash to close. This guide breaks it all down in plain English so you can walk into the closing room confident and prepared. Let’s dive in.
What escrow means in New York
Escrow has two common meanings:
- Closing escrow: a short-term holding account for the transaction itself. In New York, a settlement attorney or title company typically holds buyer funds, lender proceeds, and payoffs in a client trust account until recording is complete.
- Lender escrow (also called impounds or reserves): an ongoing account your lender may require after closing to collect property taxes and homeowner’s insurance as part of your monthly mortgage payment.
You will likely deal with both. One manages the closing funds, the other manages future bills like taxes and insurance.
Who handles your Monroe County closing
New York uses an attorney-centered process. In Monroe County, you will usually close at a settlement attorney’s office or a title company that coordinates with attorneys.
- Buyer’s attorney reviews your lender package, confirms clear title, and verifies the final settlement numbers.
- Seller’s attorney prepares the deed and transfer documents and provides payoff information for any existing loans.
- The lender issues loan documents and the Closing Disclosure, then wires loan proceeds to the settlement agent or attorney.
- The title company performs the title search, issues title insurance, and coordinates recording.
Local county and municipal offices accept recording and collect recording fees and any applicable transfer or mortgage recording taxes.
Money flow and recording basics
On or just before closing day, the lender wires loan funds to the settlement agent or attorney. You bring your remaining cash to close as a cashier’s check or wire. The settlement agent then disburses money to the seller, payoffs, taxes, insurance, and closing costs according to the signed settlement statement.
Deed and mortgage documents are recorded with the Monroe County Clerk. Depending on timing, recording may occur the same day or the next business day. Once recorded, the transfer is part of the public record.
Your Closing Disclosure timeline
For most purchase mortgages, federal rules require that you receive your Closing Disclosure at least 3 business days before closing. This gives you time to review it against your Loan Estimate, ask questions, and confirm numbers.
The Closing Disclosure replaced the old HUD-1 for most consumer mortgages. Your lender will prepare and deliver the document, and your attorney or settlement agent will align their final figures with it.
Key Closing Disclosure sections to review
Loan terms at a glance
Confirm the loan amount, interest rate, and whether the rate is fixed or adjustable. Verify any prepayment penalty details and that the product matches what you agreed to with your lender.
Closing costs and other costs
Closing costs are grouped into Loan Costs and Other Costs. You will see lender charges, title and recording fees, attorney fees, and any taxes or transfer costs that apply to your purchase.
Cash to close and credits
The Cash to Close box shows exactly what you must bring to closing. It reflects the purchase price, your deposit, any seller credits, closing costs, and lender-required escrow deposits. Make sure your earnest money deposit and any negotiated credits appear correctly.
Prepaids and reserves
Prepaids include items like daily interest from funding through month-end and your first year of homeowner’s insurance if required at closing. Initial escrow deposits (also called reserves) seed your lender-managed escrow account for upcoming property tax and insurance bills.
Prorations and adjustments
You may see prorations for property taxes or HOA dues based on the closing date. If the seller prepaid a bill that covers time after you take ownership, you will credit them for your share. If the seller owes for time before closing, you will see a credit to you.
Prepaids, reserves, and prorations explained
- Prepaid interest: Because mortgage interest accrues daily and is paid in arrears, you will prepay interest from funding through the end of the month. The amount depends on the closing date.
- Homeowner’s insurance: Lenders typically require proof of coverage effective by closing. Many collect the first year’s premium or a binder at closing.
- Initial escrow deposit: If your lender requires an escrow account for taxes and insurance, you will make an initial deposit at closing. Federal rules allow a limited cushion, but amounts vary by lender and by local tax and insurance schedules. Ask your lender early for the expected deposit.
- Prorations: Property taxes in Monroe County area towns can be billed on different schedules. Your settlement statement will split charges so each party pays their share as of the closing date.
These items change your cash to close. Review them closely on your Closing Disclosure and talk with your attorney and lender about any questions.
Hypothetical cash-to-close example
Below is a simple, hypothetical example to show how the math can work. Your numbers will differ.
- Purchase price: $350,000
- Earnest money paid: $5,000 (credited at closing)
- Down payment: $70,000 (20%)
- Loan amount: $280,000
- Closing costs estimate: $6,000
- Prepaids (first year’s homeowner insurance binder): $1,200
- Prepaid interest (partial month): $450
- Initial escrow deposit for taxes and insurance: $1,500
- Prorated property taxes (seller credit to buyer): -$800
Cash to close calculation: Down payment ($70,000) + Closing costs ($6,000) + Prepaids ($1,650) + Initial escrow ($1,500) - Earnest money credit ($5,000) - Seller credit ($800) = approximately $73,350.
Use the Cash to Close on your Closing Disclosure as your authoritative figure, and confirm your wire or cashier’s check matches that amount exactly.
Monroe County local notes
- Attorney-led closings are the norm in the Rochester area, including Pittsford, Fairport, and Webster. Expect your attorney or a title agent to coordinate details several days in advance.
- Deeds and mortgages record with the Monroe County Clerk. Ask your closing attorney about the recording fee estimate and typical timing.
- Property tax schedules and assessment rolls are managed by each town or village. Confirm local tax due dates with the Pittsford, Fairport, or Webster assessor and tax collector so you understand prorations.
- Utilities such as water and sewer may be billed separately. Your closing attorney will check for municipal liens and coordinate any final reads.
- New York State imposes transfer taxes and mortgage recording tax in many transactions. Your Closing Disclosure will itemize who pays which charges per your contract and local custom.
48–72 hour closing checklist
Start this checklist two to three days before closing:
- Confirm your final Cash to Close amount and how you will deliver funds (wire or cashier’s check). Get written instructions from the settlement agent.
- Secure your homeowner’s insurance binder naming the lender as required and send it to your lender and attorney.
- Review your Closing Disclosure line by line. Verify earnest money, seller credits, loan terms, and property details.
- Gather your government-issued ID and any documents your lender or attorney requested.
- Complete your final walk-through and promptly report any issues through your agent and attorney.
Wire safety tips
Wire fraud targeting real estate closings is a real risk. Protect yourself with these steps:
- Call to confirm wiring instructions using a phone number you obtained independently, not one in an email.
- Verify the exact dollar amount and receiving account details with the settlement attorney the business day before closing.
- If anything changes by email at the last minute, stop and confirm by phone before sending funds.
Common causes of closing delays
- Title issues that surface late, such as old liens or unreleased mortgages.
- Missing documents from the seller, like certificates of occupancy or required inspections.
- Lender funding delays due to outstanding conditions or late wires.
- Corrections to the Closing Disclosure that trigger re-delivery and a new 3-business-day wait.
- Missing insurance binder or HOA documents.
Your next steps
Ask your lender for a clear estimate of your initial escrow deposit and prepaids early in the process. Share your insurance binder as soon as you select a policy. When your Closing Disclosure arrives, review it the same day and get answers to any questions right away. If you are planning a move in or around Monroe County, our team is here to help you navigate each step with confidence.
If you would like local guidance from a trusted regional brokerage, reach out to Griffith Realty Group to discuss your plans.
FAQs
Who holds my money at closing in Monroe County?
- In New York, a settlement attorney or title company typically holds funds in an attorney trust or escrow account and disburses after documents are signed and ready for recording.
What is the difference between closing escrow and lender escrow?
- Closing escrow is a short-term holding of purchase funds until the deal closes, while a lender escrow is an ongoing account for taxes and insurance that your lender manages after closing.
How much will my lender collect for initial escrow deposits?
- It varies by lender and by local tax and insurance schedules; ask your lender for the exact amount shown on your Loan Estimate and your Closing Disclosure.
Can I reduce cash to close with seller credits?
- Yes, if negotiated in your contract; seller concessions appear as credits on your Closing Disclosure and reduce your cash to close, subject to lender limits.
What happens if my Closing Disclosure changes within three days of closing?
- Certain changes can trigger a new 3-business-day waiting period, such as a significant APR change, adding a prepayment penalty, or a change to the loan product.
Where can I verify local tax proration practices for Pittsford, Fairport, or Webster?
- Check with each town’s assessor or tax collector and the Monroe County Clerk for billing schedules, due dates, and common proration practices.
