Escrow: To close the sale of a home, a neutral, third party (the escrow agent) is engaged to assure the process will close perfectly and on time. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an online auction, PayPal is the secure third party that obtains the buyer's payment, and then disburses the payment to the seller.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being finished. This includes receiving monies and certificates, finishing required forms, and obtaining the release documents for any loans or liens that are to be paid with the transaction, assuring you have a clear title to your home before the final price is fully paid.
Escrow agents want to acquire the following legal documents:
- 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
Closing on the property happens when all of the procedures 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 home's title gets handed over to you and title insurance is issued per the policies of your individual escrow agreement.
The escrow holder receives a payment at the completion of closing. As your REALTOR, I'll let you know what is an acceptable way of paying.