The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are completed prior to the sale being finalized.
Escrow companies collect the following pieces of paperwork:
Closing on the house happens when all of the procedures of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then transferred to you as new homeowner and appropriate title insurance is issued as noted in the escrow instructions.
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.
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Once you're familiar with the escrow process, you can be a confident buyer.
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