First, a little about "escrow". When you're closing on your new house, an escrow holder is used to assure the process will close appropriately and in a certain amount of time. A home is said to be in escrow when in the closing process, payment is secured by a third party on behalf of a buyer and a seller when the exchange of money takes place. For example, in an Internet transaction, PayPal is the neutral third party that holds the buyer's funds, and then sends the money to the seller.
Clearing the final hurdles like obtaining funds, signing forms, getting the documents for loans and liens, and assuring you get a clear title to the property before your purchase gets finalized are all part of the job of the escrow holder.
Escrow holders compile the following legal documents:
- 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 all of the procedures of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then given to you as now current homeowner and related title insurance is issued as outlined in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.