Escrow: To finalize the sale of a place, a neutral, third party (the escrow company) is engaged to assure the transaction will close appropriately and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to think of what an escrow company does is to think of how you might use PayPal for Internet purchases.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being completed. This includes securing monies and records, filling out required forms, and obtaining the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your house before the asking price is fully paid.
These are the records that escrow agents usually look to collect:
- 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
- Tax statements
- Fire and other insurance policies
You're ready to close when each step of the done in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. Title to the home is then given to you as new owner and correct title insurance is issued as noted in the escrow policy.
At the close of escrow, in an acceptable form to the escrow. As your agent, I'll let you know what is an acceptable way of paying.