Escrow: To finish the sale of a property, a neutral, third party (the escrow agent) is employed to assure the transaction will close perfectly and on time. Escrow agents hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in an online transaction, PayPal is the secure third party that holds the buyer's funds, and then hands over the money to the seller.
Clearing the final hurdles like obtaining funds, finishing forms, obtaining the documents for loans and liens, and assuring you get a clear title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow holder is useful.
These are the records that escrow companies usually look for:
- 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
- Tax statements
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 get the title to the property and the title insurance gets issued as noted in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. As your real estate professional, I'll inform you of the acceptable way of paying.