Escrow: To finalize the sale of a property, a neutral, third party (the escrow agent) is brought into the picture to assure the transaction will close properly and on time. A place is said to be in escrow when in the closing process, payment is held by a third party on behalf of a buyer and a seller when the transaction is taking place. PayPal is a simple way to think of an escrow company.
The escrow agent makes sure that the terms and conditions of the agreement between the two parties are met prior to the sale being finalized.
Escrow agents compile the following pieces of paperwork:
- 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
- Loan documents
Closing on the property takes place when all of the procedures of the escrow are done. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. Title to the home is then transferred to you as new owner and related title insurance is issued as outlined in the escrow policy.
The escrow holder receives a payment when the closing is complete. As your REALTOR, I'll inform you of the acceptable way of paying.