Escrow: An escrow agent is hired to assure your home closes on time and the money exchanging part of closing goes smoothly. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. For example, in an online auction, PayPal is the secure third party that obtains the buyer's money, and then disburses the payment to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the seller and buyer are reached prior to the sale being finished.
These are the pieces of paperwork that escrow companies usually compile:
- 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
- Title insurance policies
Upon finishing of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. Title to the house is then given to you as buyer and appropriate title insurance is issued as noted in the escrow policy.
At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you updated on what comes next.