Let's talk about "escrow". An escrow company is used to assure your property closes on time and the money exchanging part of closing goes smoothly. A property is said to be in escrow when in the closing process, money is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. For example, in an Internet auction, PayPal is the secure third party that obtains the buyer's funds, and then sends the funds to the seller.
The escrow agent makes sure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finished. This includes securing monies and certificates, signing required forms, and seeking out the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your house before the agreed upon price is fully paid.
The records the escrow agent may collect include:
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
Upon finishing of all portions of the escrow, closing can take place. All payments owed and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title is given to you and title insurance is issued per the policies of your particular escrow agreement.
At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you informed on the procedure.