First, a little about "escrow". An escrow company is brought on to assure your house 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, payment is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. PayPal is a good way to picture an escrow company.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's agreement are performed prior to the sale being finalized. This includes getting monies and records, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clear title to your home before the asking price is fully paid.
Escrow agents want to acquire the following pieces of paperwork:
- 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 completion of all portions of the escrow, closing can take place. All debts and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then given to you as new owner and appropriate title insurance is issued as outlined in the escrow policy.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you updated on the procedure.