Let's talk about "escrow". To finalize the sale of a house, a neutral, third party (the escrow holder) is brought into the picture to assure the transaction will close correctly and on time. A property is said to be in escrow when in the closing process, payment is secured by a third party on behalf of a buyer and a seller when the exchange of money takes place. PayPal is a simple way to think of an escrow company.
The escrow company insures that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being finished. This includes getting monies and paperwork, completing required forms, and getting the release documents for any loans or liens that are to be paid with the transaction, assuring you have a clean title to your place before the asking price is fully paid.
These are the documents that escrow holders usually compile:
- 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
Closing on the house takes place when the steps of the escrow are done. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. Title to the home is then transferred to you as new homeowner and related title insurance is issued as outlined in the escrow policy.
When closing is finished, you'll make a payment to the escrow company. As your REALTOR, I'll let you know what is an acceptable form of payment.