Let's talk about "escrow". When you're closing on your new house, an escrow holder is used to make sure the transaction will close correctly and in a timely manner. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. For example, in an online auction, PayPal is the reliable third party that holds the buyer's funds, and then hands over the money to the seller.
The escrow agent makes sure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being completed. This includes getting payments and documents, signing required forms, and seeking out the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a clear title to your place before the purchase price is fully paid.
These are the documents that escrow agents usually look for:
- 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
- Fire and other insurance policies
You're ready to close when all parts are done in escrow process. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then secure the title to the home and the title insurance gets dispersed as agreed upon in the escrow instructions.
The escrow company receives a payment at the completion of closing. As your real estate agent, I'll let you know what is an acceptable form of payment.