Escrow: A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your place closes on time and the closing process goes smoothly. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. PayPal is a good way to picture an escrow company.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are reached in preparation of the sale being finalized.
Escrow holders want to acquire the following pieces of paperwork:
- 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
- Tax statements
You're ready to close when every step is complete in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. You'll then obtain the title to the property and the title insurance gets dispersed as stated in the escrow instructions.
The escrow company receives a payment when the closing is complete. I'll keep you informed on the next steps.