First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your house closes on time and the process goes smoothly. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a simple way to think of an escrow company.
The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finalized. This includes receiving monies and paperwork, finishing required forms, and getting the release documents for any loans or liens that were paid off with the transaction, assuring you have a clean title to your home before the asking price is fully paid.
The certificates the escrow agent may collect include:
- 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
You're ready to close when all steps are complete in escrow process. All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then transferred to you as new owner and appropriate title insurance is issued as outlined in the escrow policy.
The escrow holder receives a payment at the completion of closing. You'll know when it's time to submit the form of payment.