Escrow: To complete the sale of a house, a neutral, third party (the escrow company) is employed to assure the transaction will close properly and on time. A property is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties when the transaction is taking place. For example, in an online purchase, PayPal is the reliable third party that holds the buyer's funds, and then sends the funds to the seller.
The escrow holder insures that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being finished. This includes getting payments and documents, filling out required forms, and obtaining the release documents for any loans or liens that are to be paid with the transaction, assuring you have a free title to your home before the purchase price is fully paid.
These are the documents that escrow holders usually look for:
- 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
- Loan documents
Closing on the property takes place when the steps of the escrow are complete. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.
When closing is completed, you'll pay the fees to the escrow agent. I'll keep you updated on the next steps.