Let's talk about "escrow". When you're closing on your new home, an escrow company is used to guarantee the transaction will close correctly and in a timely manner. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. An everyday 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 the terms and conditions of the agreement between the seller and buyer are reached in preparation of the sale being finalized.
Escrow holders want to acquire the following legal documents:
- Tax statements
- 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
Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.
At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate agent, I'll let you know what is an acceptable form of payment.