Let's talk about "escrow". To close the sale of a place, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close correctly and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an Internet purchase, PayPal is the secure third party that obtains the buyer's funds, and then hands over the funds to the seller.
Clearing the final hurdles like taking in funds, finishing forms, getting the documents for loans and liens, and assuring you get a clean title to the house in preparation of your purchase gets finalized are all part of the job of the escrow holder.
The records the escrow holder may secure 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
Closing on the house takes place when the steps of the escrow are done. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then secure the title to the home and the title insurance gets dispersed as outlined in the escrow instructions.
At the close of escrow, fees are paid in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.