First, a little about "escrow". An escrow company is used to assure your house closes on time and the process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to understand the concept of what an escrow company does is to compare it to PayPal for Internet purchases.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being completed. This includes securing payments and documents, signing required forms, and seeking out the release documents for any loans or liens that have been paid with the transaction, assuring you have a free title to your home before the purchase price is fully paid.
Escrow holders want to obtain the following records:
- Loan documents
- 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
Closing on the house takes place when all of the procedures of the escrow are complete. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title is given to you and title insurance is issued per the policies of your individual escrow process.
At the close of escrow, payments are submitted in an acceptable form to the escrow. As your REALTOR, I'll inform you of the acceptable way of paying.