Escrow: When you're closing on your new place, an escrow company is used to assure the process will close correctly and in a certain amount of time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to understand what an escrow company does is to compare it to PayPal for Internet purchases.
The escrow holder makes sure that the terms and conditions of the agreement between the seller and buyer are met prior to the sale being completed.
Escrow companies look for 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
You're ready to close when all steps are complete in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then given to you as new owner and related title insurance is issued as noted in the escrow policy.
The escrow holder receives a payment when the closing is complete. I'll keep you up-to-date on the next steps.