Escrow: An escrow holder is brought on to assure your place closes on time and the transaction goes smoothly. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an Internet purchase, PayPal is the neutral third party that holds the buyer's payment, and then hands over the funds to the seller.
Clearing the final hurdles like receiving funds, signing forms, getting the documents for loans and liens, and assuring you get a clean title to the property prior to your purchase gets finalized are all part of the job of the escrow holder.
The documents the escrow agent may obtain include:
- 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
- Loan documents
- Tax statements
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 property is then transferred to you as new homeowner and appropriate title insurance is issued as outlined in the escrow instructions.
When closing is completely finished, you'll make a payment to the escrow holder. You'll know when it's time to submit the form of payment.