Escrow: To finalize the sale of a property, a neutral, third party (the escrow company) is engaged to assure the process will close properly and on time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an Internet transaction, PayPal is the reliable third party that obtains the buyer's money, and then disburses the payment to the seller.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's contract are met prior to the sale being finished. This includes getting payments and documents, signing required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clear title to your house before the purchase price is fully paid.
Escrow holders look for the following forms:
- 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
- Fire and other insurance policies
- Title insurance policies
Upon completion of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then get the title to the property and the title insurance gets issued as outlined in the escrow instructions.
When closing is finished, you'll pay the fees to the escrow agent. I'll keep you updated on what comes next.