Escrow: To finish the sale of a house, a neutral, third party (the escrow agent) is employed to assure the process will close correctly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online transaction, PayPal is the reliable third party that obtains the buyer's money, and then sends the money to the seller.
Settling the last details like receiving funds, completing forms, getting the documents for loans and liens, and assuring you get a spotless title to the property prior to your purchase gets finalized are all parts of closing in which an escrow holder is useful.
Escrow companies look for the following records:
- 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 steps are finished in escrow process. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title goes to you and title insurance begins per the policies of your individual escrow agreement.
At the close of escrow, fees are paid in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.