Escrow: When you're closing on your new house, an escrow holder is used to guarantee the transaction will close correctly and in a certain amount of time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a good way to picture an escrow company.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being completed. This includes getting payments and paperwork, completing required forms, and obtaining 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 final price is fully paid.
Escrow holders compile the following records:
- 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
- Fire and other insurance policies
- Title insurance policies
You're ready to close when all parts are done in escrow process. All payments owed and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to you as now current homeowner and appropriate title insurance is issued as noted in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. As your REALTOR, I'll inform you of the acceptable way of paying.