Let's talk about "escrow". When you're closing on your new home, an escrow agent is used to guarantee the transaction will close without problems and in a certain amount of time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web purchase, PayPal is the neutral third party that obtains the buyer's cash, and then sends the money to the seller.
Tying up any loose ends like receiving funds, finishing forms, securing the documents for loans and liens, and making sure you get a clear title to the home before your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow agents look for the following documents:
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
Closing on the property takes place when the steps of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. The home's title is given to you and title insurance is issued per the steps of your particular escrow process.
The escrow company gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.