Let's talk about "escrow". When you're closing on your new property, an escrow company is used to make sure the transaction will close without problems and in a certain amount of time. A property is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in a Web auction, PayPal is the neutral third party that holds the buyer's cash, and then sends the funds to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finalized.
The certificates the escrow company 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
You're ready to close when every step is done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. Title to the house is then transferred to you as buyer and related title insurance is issued as outlined in the escrow policy.
When closing is completely finished, you'll submit a payment to the escrow holder. I'll keep you up-to-date on what comes next.