Escrow: An escrow agent is brought on to assure your home closes on time and the transaction goes smoothly. A property is said to be in escrow when in the closing transaction, money is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. PayPal is a simple way to think of an escrow company.
The escrow agent makes sure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being finalized. This includes receiving monies and records, signing required forms, and getting the release documents for any loans or liens that are to be cleared with the transaction, assuring you have a clear title to your house before the asking price is fully paid.
The documents the escrow holder may secure include:
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
Upon finishing of all instructions of the escrow, closing can take place. 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 buyer and correct title insurance is issued as outlined in the escrow policy.
At the close of escrow, payments are submitted in an acceptable form to the escrow. As your real estate professional, I'll inform you of the acceptable way of paying.