First, a little about "escrow". When you're closing on your new house, an escrow holder is used to make certain the process will close correctly and in a timely manner. A home is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of a buyer and a seller when the transaction is taking place. An everyday way to think of what an escrow company does is to think of the use of PayPal for Internet purchases.
The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are met prior to the sale being finalized.
Escrow companies want to acquire 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
You're ready to close when all steps are done in escrow process. All payments owed and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then obtain the title to the property and the title insurance gets issued as agreed upon 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 updated on the next steps.