Escrow: An escrow holder is used to assure your home closes on time and the closing process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web auction, PayPal is the secure third party that obtains the buyer's funds, and then sends the funds to the seller.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being finished.
The pieces of paperwork the escrow company may obtain include:
- 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 finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. I'll keep you up-to-date on the procedure.