Escrow: When you're closing on your new property, an escrow agent is used to guarantee the process will close properly and in a certain amount of time. A property is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. An easy way to think of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are completed prior to the sale being finished.
These are the records that escrow companies usually look to collect:
- 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
- Title insurance policies
You're ready to close when all steps are done in escrow process. All debts and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to you as buyer and related title insurance is issued as noted in the escrow policy.
When closing is in it's last step, you'll pay the fees to the escrow company. I'll keep you informed on the next steps.