First, a little about "escrow". When you're closing on your new property, an escrow holder is used to insure the process will close correctly and in a certain amount of time. A place is said to be in escrow when in the closing transaction, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. PayPal is a good example of an escrow company.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are reached prior to the sale being finalized.
The pieces of paperwork the escrow company may secure include:
- 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 home happens when the steps of the escrow are done. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title is given to you and title insurance is issued per the policies of your particular escrow process.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. I'll keep you informed on the next steps.