First, a little about "escrow". To complete the sale of a home, a neutral, third party (the escrow company) is engaged to assure the process will close properly and on time. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. An everyday way to think of what an escrow company does is to think of the use of PayPal for online purchases.
The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are completed prior to the sale being completed.
Escrow holders compile the following 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
- Loan documents
Upon finishing of all instructions of the escrow, closing can take place. 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 house is then given to you as new owner and related title insurance is issued as outlined in the escrow instructions.
The escrow agent receives a payment when the closing is complete. I'll keep you informed on what comes next.