Let's talk about "escrow". To close the sale of a property, a neutral, third party (the escrow company) is brought into the picture to assure the process will close appropriately and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to think of what an escrow company does is to think of the use of PayPal for Internet purchases.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's contract are met prior to the sale being finalized. This includes securing monies and documents, signing required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clear title to your property before the purchase price is fully paid.
The pieces of paperwork the escrow holder may obtain include:
- 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
Closing on the house takes place when the steps of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. Title to the home is then given to you as now current homeowner and related title insurance is issued as outlined in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.