First, a little about "escrow". An escrow company is brought on to assure your place closes on time and the transaction goes smoothly. A place is said to be in escrow when in the closing process, payment is secured by a third party on behalf of two parties when the exchange of money takes place. PayPal is a good way to picture an escrow company.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are completed in preparation of the sale being completed.
These are the records that escrow companies usually compile:
- Loan documents
- 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
Upon completion of all instructions of the escrow, closing can take place. All debts 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 given to you as new homeowner and correct title insurance is issued as outlined in the escrow policy.
When closing is done, you'll pay the fees to the escrow agent. You'll know when it's time to submit the form of payment.