First, a little about "escrow". To close the sale of a place, a neutral, third party (the escrow agent) is employed to assure the transaction will close properly and on time. A place is said to be in escrow when in the closing process, payment is secured by a third party on behalf of two parties when the transaction is taking place. An everyday way to understand what an escrow company does is to compare it to PayPal for online purchases.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finalized. This includes receiving payments 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 clear title to your property before the final price is fully paid.
Escrow companies collect the following records:
- 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
- Title insurance policies
Upon finishing of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. The house's title goes to you and title insurance is issued per the steps of your individual escrow agreement.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. I'll keep you informed on the procedure.