First, a little about "escrow". To close the sale of a place, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close perfectly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online auction, PayPal is the reliable third party that obtains the buyer's money, and then sends the funds to the seller.
Clearing the final hurdles like taking in funds, finishing forms, securing 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 part of the job of the escrow agent.
The records the escrow company may collect include:
- 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
- Loan documents
- Tax statements
You're ready to close when all parts are complete in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then given to you as new owner and correct title insurance is issued as noted in the escrow instructions.
When closing is completed, you'll pay the fees to the escrow holder. You'll know when it's time to submit the form of payment.