Escrow: When you're closing on your new property, an escrow holder is used to make certain the process will close correctly and in a specific time frame. 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 taking in funds, completing forms, getting the documents for loans and liens, and making sure 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.
Escrow companies look for the following legal documents:
- Loan documents
- 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
Upon finishing of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. You'll then receive the title to the house and the title insurance gets issued as agreed upon in the escrow instructions.
The escrow holder gets a payment at the completion of closing. As your real estate professional, I'll let you know what is an acceptable way of paying.