First, a little about "escrow". To close the sale of a house, a neutral, third party (the escrow holder) is employed to assure the process will close appropriately and on time. A property is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. PayPal is a good example of an escrow company.
The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being completed. This includes receiving monies and documents, completing required forms, and getting the release documents for any loans or liens that have been paid off with the transaction, assuring you have a free title to your house before the agreed upon price is fully paid.
These are the legal documents that escrow agents usually look for:
- 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
Upon completion of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then obtain the title to the home and the title insurance gets issued as stated in the escrow instructions.
When closing is completed, you'll pay the fees to the escrow company. As your real estate professional, I'll let you know what is an acceptable way of paying.