For example, a hot market like the Denver, Colorado area will usually come with many types of binder requirements while a home sale in rural Iowa won’t be packed with as much “legalese. An insurance binder is a temporary policy that is typically issued before your formal policy. Log in or contact your agent for answers Log in to pay your bill, get policy docs, and even file a claim Download the Safeco mobile app its the easiest way. How mortgage binders work in your area don’t depend on local laws and ordinances but rather customs determined by real estate markets. The binder keeps interest in a transaction and encourages open communication between buyer and seller but it’s an informal agreement and is eventually replaced by the formal (and legally binding) agreement of sale. The mortgage binder often involves putting a down payment known as earnest money, though a down payment is not required on all real estate binders.ĭespite its name a real estate binder is not legally binding.
Most often a binder in real estate refers to the real estate binder, also known as an escrow or mortgage binder.Ī real estate binder refers to an informal agreement between buyer and seller to indicate strong interest in a property transaction.
Because they’re used in many contexts, binders can be confusing. When buying a house, a binder refers to formal and informal agreements leading up to the closing of the property.
