Escrow: To complete the sale of a property, a neutral, third party (the escrow agent) is engaged to assure the transaction will close perfectly and on time. Escrow agents hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in a Web purchase, PayPal is the reliable third party that obtains the buyer's money, and then hands over the money to the seller.
Tying up any loose ends like receiving funds, completing forms, getting the documents for loans and liens, and assuring you get a spotless title to the house before your purchase gets finalized are all part of the job of the escrow agent.
These are the documents that escrow holders usually compile:
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
You're ready to close when all parts are finished in escrow process. All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the house is then given to you as new homeowner and correct title insurance is issued as outlined in the escrow policy.
At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate professional, I'll inform you of the acceptable form of payment.