First, a little about "escrow". When you're closing on your new place, an escrow agent is used to insure the process will close appropriately and in a certain amount of time. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good way to picture an escrow company.
Clearing the final hurdles like receiving funds, finishing forms, getting the documents for loans and liens, and making sure you get a clear title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow agent is useful.
These are the legal forms that escrow holders usually look for:
- 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
Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then obtain the title to the home and the title insurance gets dispersed as stated in the escrow instructions.
The escrow agent gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.