Let's talk about "escrow". An escrow agent is brought on to assure your property closes on time and the money exchanging part of closing goes smoothly. A house is said to be in escrow when in the closing process, funds is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. A simple way to think of what an escrow company does is to think of how you might use PayPal for online purchases.
Clearing the final hurdles like taking in funds, finishing forms, getting the documents for loans and liens, and assuring you get a clean title to the property before your purchase gets finalized are all parts of closing in which an escrow company is useful.
Escrow companies want to obtain the following records:
- 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 completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. The property's title gets handed over to you and title insurance is issued per the steps of your particular escrow agreement.
The escrow holder receives a payment when the closing is complete. I'll keep you up-to-date on what comes next.