First, a little about "escrow". To finish the sale of a property, a neutral, third party (the escrow company) is engaged to assure the transaction will close properly and on time. A property is said to be in escrow when in the closing process, money 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. For example, in an online purchase, PayPal is the neutral third party that holds the buyer's funds, and then disburses the money to the seller.
The escrow company makes sure that the terms and conditions of the agreement between the sellers and the buyers are met prior to the sale being finished.
Escrow companies want to acquire the following pieces of paperwork:
- 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 each step of the complete in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then transferred to you as new owner and related title insurance is issued as outlined in the escrow instructions.
The escrow holder receives a payment when the closing is complete. I'll keep you informed on the procedure.