Escrow: To finalize the sale of a place, a neutral, third party (the escrow company) is engaged to assure the process will close perfectly and on time. A home is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of two parties when the transaction is taking place. For example, in an online transaction, PayPal is the secure third party that holds the buyer's funds, and then disburses the funds to the seller.
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being completed. This includes securing payments and paperwork, completing required forms, and getting the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your property before the final price is fully paid.
The pieces of paperwork the escrow agent may collect include:
- 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
Upon completion of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The property's title is given to you and title insurance begins per the steps of your particular escrow agreement.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your REALTOR, I'll inform you of the acceptable way of paying.