First, a little about "escrow". To close the sale of a place, a neutral, third party (the escrow company) is employed to assure the process will close correctly and on time. A place is said to be in escrow when in the closing transaction, funds 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. A simple way to understand the concept of what an escrow company does is to think of the use of PayPal for Internet purchases.
Clearing the final hurdles like taking in funds, signing forms, securing the documents for loans and liens, and assuring you get a spotless title to the house before your purchase gets finalized are all parts of closing in which an escrow company is useful.
Escrow holders want to acquire the following records:
- 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 all steps are done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. Title to the home is then given to you as now current homeowner and appropriate title insurance is issued as noted in the escrow policy.
When closing is done, you'll pay the fees to the escrow company. I'll keep you up-to-date on the procedure.