First, a little about "escrow". An escrow holder is brought on to assure your place closes on time and the process goes smoothly. A property is said to be in escrow when in the closing process, 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 an online auction, PayPal is the neutral third party that obtains the buyer's cash, and then hands over the payment to the seller.
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being finished. This includes securing funds and certificates, filling out required forms, and getting the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your place before the asking price is fully paid.
The documents the escrow holder may obtain include:
- 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
- Tax statements
You're ready to close when all parts are complete in escrow process. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title is given to you and title insurance is issued per the steps of your individual escrow process.
At the close of escrow, payments are submitted in an acceptable form to the escrow. As your real estate professional, I'll let you know what is an acceptable form of payment.