Escrow: To finish the sale of a house, a neutral, third party (the escrow holder) is employed to assure the process will close correctly and on time. A place 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. For example, in a Web transaction, PayPal is the neutral third party that obtains the buyer's funds, and then hands over the payment to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the sellers and the buyers are completed in preparation of the sale being finalized.
These are the documents that escrow holders usually compile:
- 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
Upon completion of all portions of the escrow, closing can take place. All payments owed and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title gets transferred to you and title insurance begins per the policies of your individual escrow agreement.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. As your agent, I'll inform you of the acceptable way of paying.