Let's talk about "escrow". When you're closing on your new property, an escrow company is used to insure the transaction will close properly and in a specific time frame. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an Internet transaction, PayPal is the secure third party that holds the buyer's payment, and then hands over the money to the seller.
The escrow company makes sure 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 monies and paperwork, filling out required forms, and seeking out the release documents for any loans or liens that were cleared with the transaction, assuring you have a free title to your property before the negotiated price is fully paid.
Escrow holders want to obtain the following legal 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
- Loan documents
Closing on the property happens when all of the procedures of the escrow are complete. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then receive the title to the house and the title insurance gets issued as agreed upon 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 professional, I'll let you know what is an acceptable way of paying.