Escrow: An escrow holder is used to assure your property closes on time and the closing process goes smoothly. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online purchase, PayPal is the neutral third party that obtains the buyer's money, and then disburses the funds to the seller.
The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are reached prior to the sale being finished.
Escrow agents want to acquire the following records:
- 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
- Title insurance policies
You're ready to close when every step is complete in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. Title to the property is then transferred to you as new homeowner and correct 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 procedure.