First, a little about "escrow". When you're closing on your new home, an escrow company is used to make sure the transaction will close properly and on time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web purchase, PayPal is the secure third party that obtains the buyer's cash, and then hands over the funds to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are reached in preparation of the sale being finished.
The certificates the escrow agent may secure include:
- 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
- Terms of sale and any seller-assisted financing
You're ready to close when all parts are finished in escrow process. All payments owed and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title gets transferred to you and title insurance is issued per the policies of your individual escrow process.
The escrow holder gets a payment at the completion of closing. As your real estate agent, I'll inform you of the acceptable form of payment.