Let's talk about "escrow". An escrow agent is brought on to assure your house closes on time and the process goes smoothly. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web transaction, PayPal is the reliable third party that obtains the buyer's cash, and then hands over the money to the seller.
Tying up any loose ends like taking in funds, completing forms, securing the documents for loans and liens, and making sure you get a spotless title to the home before your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow agents want to obtain 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 the steps of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then given to you as buyer and related title insurance is issued as outlined in the escrow policy.
The escrow agent receives a payment at the completion of closing. I'll keep you informed on the next steps.