First, a little about "escrow". To finalize the sale of a home, a neutral, third party (the escrow agent) is employed to assure the process will close perfectly and on time. A house is said to be in escrow when in the closing process, money is secured by a third party on behalf of a buyer and a seller when the transaction is taking place. For example, in a Web auction, PayPal is the secure third party that holds the buyer's funds, and then hands over the funds to the seller.
Settling the last details like taking in funds, completing 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.
The certificates the escrow holder may collect include:
- 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 completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then receive the title to the house and the title insurance gets dispersed as stated in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.