Let's talk about "escrow". To close the sale of a property, a neutral, third party (the escrow agent) is brought into the picture to assure the process will close perfectly and on time. A house is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. A simple way to think of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are performed prior to the sale being completed.
Escrow companies want to obtain the following pieces of paperwork:
- Loan documents
- 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
You're ready to close when all parts are finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then given to you as new owner and appropriate title insurance is issued as outlined in the escrow policy.
When closing is finished, you'll submit a payment to the escrow company. I'll keep you informed on the next steps.