First, a little about "escrow". To close the sale of a property, a neutral, third party (the escrow company) is employed to assure the transaction will close perfectly and on time. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. For example, in an Internet auction, PayPal is the reliable third party that obtains the buyer's payment, and then hands over the funds to the seller.
The escrow company makes sure that the terms and conditions of the agreement between the sellers and the buyers are reached prior to the sale being completed.
Escrow companies collect the following pieces of paperwork:
- 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
- Title insurance policies
Upon finishing of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. You'll then receive the title to the property and the title insurance gets dispersed as noted in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.