First, a little about "escrow". An escrow company is hired to assure your place closes on time and the process goes smoothly. A house is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. For example, in a Web purchase, PayPal is the reliable third party that obtains the buyer's payment, and then hands over the funds to the seller.
Settling the last details like receiving funds, signing forms, obtaining the documents for loans and liens, and making sure you get a clean title to the home prior to your purchase gets finalized are all parts of closing in which an escrow holder is useful.
These are the records that escrow companies usually look to collect:
- 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
- Loan documents
You're ready to close when each step of the done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then transferred to you as new homeowner and appropriate title insurance is issued as outlined in the escrow policy.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.