First, a little about "escrow". When you're closing on your new place, an escrow company is used to insure the process will close appropriately and in a specific time frame. A property is said to be in escrow when in the closing process, money is secured by a third party on behalf of a buyer and a seller when the transaction is taking place. For example, in an Internet purchase, PayPal is the reliable third party that obtains the buyer's cash, and then sends the money to the seller.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are completed in preparation of the sale being finished.
The records the escrow holder may secure include:
- 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
Closing on the property happens when the steps of the escrow are done. All debts and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title is given to you and title insurance is issued per the policies of your individual escrow agreement.
The escrow company gets a payment at the completion of closing. I'll keep you up-to-date on the next steps.