Escrow: To finalize the sale of a property, a neutral, third party (the escrow holder) 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. PayPal is a simple way to think of an escrow company.
The escrow company insures that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being completed. This includes receiving funds and documents, completing required forms, and getting the release documents for any loans or liens that have been paid with the transaction, assuring you have a clean title to your place before the negotiated price is fully paid.
These are the legal documents that escrow holders usually look to collect:
- Title insurance policies
- 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
You're ready to close when every step is complete in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then obtain the title to the property and the title insurance gets dispersed as noted in the escrow instructions.
When closing is completely finished, you'll submit a payment to the escrow holder. As your agent, I'll inform you of the acceptable way of paying.