Escrow: An escrow agent is used to assure your property closes on time and the money exchanging part of closing goes smoothly. A place is said to be in escrow when in the closing transaction, money is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. For example, in an Internet purchase, PayPal is the reliable third party that obtains the buyer's cash, and then sends the money to the seller.
The escrow agent insures that all terms and conditions of the seller's and buyer's contract are completed prior to the sale being completed. This includes receiving funds and documents, filling out required forms, and seeking out the release documents for any loans or liens that are to be cleared with the transaction, assuring you have a clear title to your house before the final price is fully paid.
These are the records that escrow companies usually look for:
- Tax statements
- Fire and other insurance policies
- 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
Upon finishing of all instructions of the escrow, closing can take place. All payments owed and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title goes to you and title insurance is issued per the steps of your individual escrow agreement.
The escrow agent gets a payment when the closing is complete. I'll keep you up-to-date on the procedure.