First, a little about "escrow". When you're closing on your new home, a neutral, third party (known as the escrow holder or the escrow agent) is used to assure the process will close correctly and in a specific time frame. A property is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties when the exchange of money takes place. PayPal is a good example of an escrow company.
Tying up any loose ends like receiving funds, finishing forms, getting the documents for loans and liens, and assuring you get a clear title to the property in preparation of your purchase gets finalized are all part of the job of the escrow company.
The pieces of paperwork the escrow company may secure 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
Closing on the property takes place when all of the procedures of the escrow are complete. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then receive the title to the property and the title insurance gets dispersed as noted in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. As your real estate agent, I'll let you know what is an acceptable way of paying.