First, a little about "escrow". When you're closing on your new house, an escrow company is used to insure the process will close properly and in a timely manner. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. A simple way to understand what an escrow company does is to compare it to PayPal for online purchases.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finalized. This includes receiving funds and records, completing required forms, and obtaining the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a clean title to your property before the asking price is fully paid.
Escrow companies compile the following pieces of paperwork:
- 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 home takes place when all of the procedures of the escrow are done. 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 issued as stated in the escrow instructions.
When closing is completed, you'll pay the fees to the escrow agent. You'll know when it's time to submit the form of payment.