Let's talk about "escrow". When you're closing on your new home, a neutral, third party (known as the escrow holder or the escrow agent) is used to ensure the transaction will close correctly and in a certain amount of time. A house is said to be in escrow when in the closing transaction, money is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. PayPal is a good example of an escrow company.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being completed. This includes receiving payments and paperwork, finishing required forms, and getting 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 companies collect the following forms:
- 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
You're ready to close when each step of the complete in escrow process. All payments owed and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title goes to you and title insurance is issued per the steps of your particular escrow process.
When closing is finished, you'll submit a payment to the escrow company. I'll keep you up-to-date on the procedure.