First, a little about "escrow". When you're closing on your new property, an escrow agent is used to assure the transaction will close correctly and in a specific time frame. A place is said to be in escrow when in the closing transaction, money 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. An everyday way to think of what an escrow company does is to compare it to PayPal for Internet purchases.
The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being completed.
These are the pieces of paperwork that escrow holders usually look to collect:
- 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. The property's title goes to you and title insurance is issued per the policies of your individual escrow process.
When closing is completed, you'll pay the fees to the escrow agent. I'll keep you up-to-date on the next steps.