Let's talk about "escrow". An escrow agent is used to assure your place closes on time and the closing process goes smoothly. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.
Settling the last details like receiving funds, signing forms, securing the documents for loans and liens, and assuring you get a clear title to the home in preparation of your purchase gets finalized are all parts of closing in which an escrow company is useful.
These are the legal forms that escrow agents usually compile:
- 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 each step of the done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.
The escrow company gets a payment at the completion of closing. You'll know when it's time to submit the form of payment.