First, a little about "escrow". An escrow holder is used to assure your home closes on time and the transaction goes smoothly. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a simple way to think of an escrow company.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being completed. This includes receiving payments and documents, filling out required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a clear title to your place before the agreed upon price is fully paid.
Escrow holders collect the following pieces of paperwork:
- 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
Upon completion of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then transferred to you as now current homeowner and related title insurance is issued as noted in the escrow policy.
At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form of payment.