Let's talk about "escrow". An escrow agent is hired to assure your home closes on time and the money exchanging part of closing goes smoothly. When money is 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 think of how you might use PayPal for Internet purchases.
Clearing the final hurdles like taking in funds, completing forms, securing the documents for loans and liens, and making sure you get a clean title to the home prior to your purchase gets finalized are all parts of closing in which an escrow holder is useful.
Escrow companies look for the following documents:
- 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
- Fire and other insurance policies
Closing on the house happens when all of the procedures of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. The home's title gets transferred to you and title insurance begins per the steps of your individual escrow process.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you updated on the next steps.