First, a little about "escrow". When you're closing on your new place, an escrow company is used to guarantee the transaction will close correctly and in a specific time frame. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an online auction, PayPal is the secure third party that obtains the buyer's funds, and then hands over the payment to the seller.
The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are reached in preparation of the sale being finished.
These are the pieces of paperwork that escrow holders usually look to collect:
- 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
- Fire and other insurance policies
You're ready to close when all parts are finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. The house's title goes to you and title insurance begins per the steps of your particular escrow process.
The escrow company receives a payment when the closing is complete. You'll know when it's time to submit the form of payment.