Escrow: When you're closing on your new place, an escrow agent is used to make sure the process will close appropriately and on time. A house is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in a Web transaction, PayPal is the neutral third party that obtains the buyer's money, and then disburses the funds to the seller.
Settling the last details like taking in funds, signing forms, getting the documents for loans and liens, and assuring you get a spotless title to the home before your purchase gets finalized are all parts of closing in which an escrow holder is useful.
Escrow agents collect the following pieces of paperwork:
- 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 each step of the finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. The property's title is given to you and title insurance begins per the steps of your individual escrow process.
At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate professional, I'll let you know what is an acceptable way of paying.