Escrow: When you're closing on your new place, an escrow holder is used to make certain the process will close appropriately and in a specific time frame. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's contract are performed prior to the sale being finalized. This includes getting funds and documents, finishing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your place before the asking price is fully paid.
The certificates the escrow holder 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 takes place when the steps of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. The house's title goes to you and title insurance begins per the policies of your particular escrow process.
When closing is completed, you'll submit a payment to the escrow holder. I'll keep you informed on what comes next.