Let's talk about "escrow". To complete the sale of a property, a neutral, third party (the escrow company) is brought into the picture to assure the process will close correctly and on time. A place is said to be in escrow when in the closing process, payment is held by a third party on behalf of a buyer and a seller when the transaction is taking place. For example, in a Web purchase, PayPal is the secure third party that holds the buyer's cash, and then hands over the funds to the seller.
Settling the last details like obtaining funds, signing forms, getting the documents for loans and liens, and assuring you get a clean title to the house prior to your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow holders collect the following forms:
- 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. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. You'll then get the title to the house and the title insurance gets issued as outlined in the escrow instructions.
The escrow holder gets a payment at the completion of closing. As your real estate professional, I'll inform you of the acceptable form of payment.