First, a little about "escrow". An escrow company is hired to assure your home closes on time and the transaction goes smoothly. A home is said to be in escrow when in the closing process, money is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. A simple way to understand the concept of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow agent makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being finished. This includes securing funds and records, completing required forms, and getting the release documents for any loans or liens that were cleared with the transaction, assuring you have a clean title to your place before the asking price is fully paid.
Escrow holders want to obtain the following records:
- 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 instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the house and the title insurance gets dispersed as outlined in the escrow instructions.
When closing is completed, you'll submit a payment to the escrow holder. I'll keep you updated on the next steps.