First, a little about "escrow". When you're closing on your new place, an escrow company is used to ensure the process will close correctly and in a timely manner. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web auction, PayPal is the reliable third party that obtains the buyer's money, and then disburses the funds to the seller.
The escrow holder insures that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finalized. This includes getting funds and records, signing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your home before the purchase price is fully paid.
The documents the escrow agent may secure 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
You're ready to close when each step of the done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. The property's title gets transferred to you and title insurance begins per the steps of your individual escrow process.
When closing is completed, you'll submit a payment to the escrow agent. I'll keep you up-to-date on the procedure.