Escrow: To close the sale of a place, a neutral, third party (the escrow agent) is brought into the picture to assure the process will close correctly and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web purchase, PayPal is the reliable third party that holds the buyer's money, and then sends the money to the seller.
The escrow agent makes sure that all terms and conditions of the seller's and buyer's contract are performed prior to the sale being finished. This includes securing monies and paperwork, finishing required forms, and obtaining the release documents for any loans or liens that are to be paid with the transaction, assuring you have a clean title to your place before the purchase price is fully paid.
The certificates the escrow holder may obtain include:
- 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
You're ready to close when all parts are finished in escrow process. All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then secure the title to the home and the title insurance gets issued as agreed upon in the escrow instructions.
The escrow holder gets a payment at the completion of closing. I'll keep you updated on what comes next.