First, a little about "escrow". An escrow company is hired to assure your property closes on time and the closing process goes smoothly. A place is said to be in escrow when in the closing transaction, money is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in an online purchase, PayPal is the secure third party that holds the buyer's cash, and then hands over the funds to the seller.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finalized. This includes getting payments and paperwork, completing required forms, and getting the release documents for any loans or liens that are to be cleared with the transaction, assuring you have a clear title to your house before the negotiated price is fully paid.
Escrow agents want to acquire the following documents:
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
Upon finishing of all portions of the escrow, closing can take place. All debts 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 owner and correct title insurance is issued as outlined in the escrow policy.
The escrow agent receives a payment when the closing is complete. As your real estate agent, I'll let you know what is an acceptable way of paying.