First, a little about "escrow". When you're closing on your new home, an escrow agent is used to make sure the process will close correctly and in a certain amount of time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online transaction, PayPal is the reliable third party that obtains the buyer's payment, and then disburses the payment to the seller.
Tying up any loose ends like obtaining funds, finishing forms, obtaining the documents for loans and liens, and making sure you get a spotless title to the home prior to your purchase gets finalized are all parts of closing in which an escrow holder is useful.
Escrow holders look for the following records:
- 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
- Fire and other insurance policies
- Title insurance policies
Closing on the home takes place when all of the procedures of the escrow are finished. All payments owed and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then transferred to you as buyer and appropriate title insurance is issued as noted in the escrow instructions.
When closing is completed, you'll submit a payment to the escrow holder. As your REALTOR, I'll inform you of the acceptable form of payment.