First, a little about "escrow". When you're closing on your new place, a neutral, third party (known as the escrow holder or the escrow agent) is used to make certain the transaction will close correctly and in a specific time frame. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web auction, PayPal is the reliable third party that holds the buyer's money, and then sends the payment to the seller.
Clearing the final hurdles like taking in funds, finishing forms, securing the documents for loans and liens, and assuring you get a spotless title to the property prior to your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow agents compile the following documents:
- Loan 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
Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. You'll then obtain the title to the house and the title insurance gets issued as outlined in the escrow instructions.
When closing is finished, you'll submit a payment to the escrow agent. As your REALTOR, I'll inform you of the acceptable way of paying.