Let's talk about "escrow". To finish the sale of a house, a neutral, third party (the escrow agent) is engaged to assure the transaction will close perfectly and on time. Escrow companies hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in a Web purchase, PayPal is the neutral third party that obtains the buyer's cash, and then sends the money to the seller.
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being completed. This includes getting payments and paperwork, filling out required forms, and getting the release documents for any loans or liens that have been paid with the transaction, assuring you have a free title to your place before the agreed upon price is fully paid.
The documents the escrow holder may obtain include:
- 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 finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then given to you as buyer and correct title insurance is issued as noted in the escrow instructions.
When closing is finished, you'll submit a payment to the escrow holder. As your agent, I'll let you know what is an acceptable form of payment.