Escrow: An escrow company is brought on to assure your property closes on time and the money exchanging part of closing goes smoothly. A property is said to be in escrow when in the closing process, funds is held by a third party on behalf of a buyer and a seller when the exchange of money takes place. An everyday way to understand what an escrow company does is to think of the use of PayPal for online purchases.
The escrow company makes sure that the terms and conditions of the agreement between the two parties are met in preparation of the sale being finalized.
The pieces of paperwork the escrow company may obtain include:
- 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
Closing on the house takes place when all of the procedures of the escrow are finished. All debts and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then given to you as now current homeowner and related title insurance is issued as noted in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.