Escrow: To finish the sale of a house, a neutral, third party (the escrow company) is engaged to assure the process will close perfectly and on time. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an Internet purchase, PayPal is the neutral third party that holds the buyer's money, and then disburses the funds to the seller.
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.
Escrow agents collect the following records:
- 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
Closing on the house happens when the steps of the escrow are finished. All debts and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then obtain the title to the property and the title insurance gets issued as stated in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable way of paying.