Escrow: To finish the sale of a property, a neutral, third party (the escrow company) is engaged to assure the transaction will close appropriately and on time. Escrow companies hold money for "safe-keeping" in an exchange between a buyer and seller. For example, in an online transaction, PayPal is the neutral third party that holds the buyer's funds, and then disburses the payment to the seller.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being completed. This includes securing monies and records, finishing required forms, and obtaining the release documents for any loans or liens that were paid off with the transaction, assuring you have a clean title to your home before the negotiated price is fully paid.
The certificates the escrow company may secure 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
Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the property and the title insurance gets dispersed as agreed upon in the escrow instructions.
At the close of escrow, payments are submitted in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form of payment.