Escrow: An escrow company is brought on to assure your property closes on time and the process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being finalized.
These are the pieces of paperwork that escrow companies usually look to collect:
- 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
You're ready to close when each step of the done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The home's title gets transferred to you and title insurance begins per the policies of your particular escrow agreement.
The escrow holder receives a payment at the completion of closing. I'll keep you up-to-date on what comes next.