Escrow: An escrow holder is used to assure your place closes on time and the money exchanging part of closing goes smoothly. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. A simple way to understand what an escrow company does is to think of how you might use PayPal for online purchases.
Settling the last details like receiving funds, finishing forms, obtaining the documents for loans and liens, and making sure you get a clear title to the house in preparation of your purchase gets finalized are all part of the job of the escrow holder.
Escrow holders compile the following pieces of paperwork:
- 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
- Tax statements
- Fire and other insurance policies
Upon completion of all portions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. You'll then obtain the title to the property and the title insurance gets issued as stated in the escrow instructions.
When closing is in it's last step, you'll submit a payment to the escrow holder. I'll keep you informed on the next steps.