Escrow: An escrow holder is used to assure your house closes on time and the process goes smoothly. Escrow holders hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in an Internet auction, PayPal is the reliable third party that holds the buyer's cash, and then hands over the money to the seller.
Settling the last details like receiving funds, finishing forms, getting 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 holder is useful.
Escrow holders compile the following legal documents:
- 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
Upon completion of all portions of the escrow, closing can take place. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title gets transferred to you and title insurance is issued per the policies of your particular escrow agreement.
When closing is done, you'll pay the fees to the escrow company. As your real estate professional, I'll let you know what is an acceptable form of payment.