First, a little about "escrow". To finalize the sale of a house, a neutral, third party (the escrow company) is brought into the picture to assure the transaction will close properly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.
The escrow agent is careful to assure 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 are to be paid off with the transaction, assuring you have a free title to your home before the final price is fully paid.
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 house takes place when the steps of the escrow are complete. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then transferred to you as new homeowner and appropriate title insurance is issued as noted in the escrow policy.
When closing is finished, you'll make a payment to the escrow company. I'll keep you up-to-date on what comes next.