First, a little about "escrow". An escrow company is brought on to assure your property 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 think of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finalized. This includes securing monies and documents, filling out required forms, and getting the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your place before the purchase price is fully paid.
These are the records that escrow agents usually compile:
- 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
You're ready to close when all steps are complete in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then given to you as new homeowner and appropriate title insurance is issued as outlined in the escrow policy.
The escrow holder receives a payment at the completion of closing. You'll know when it's time to submit the form of payment.