First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your property closes on time and the process goes smoothly. A place is said to be in escrow when in the closing process, funds is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in a Web auction, PayPal is the reliable third party that obtains the buyer's money, and then hands over the money to the seller.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being finalized. This includes getting monies and paperwork, signing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your place before the agreed upon price is fully paid.
Escrow agents want to acquire the following forms:
- 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
- Fire and other insurance policies
Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. The house's title gets transferred to you and title insurance begins per the policies of your individual escrow agreement.
When closing is completed, you'll pay the fees to the escrow company. You'll know when it's time to submit the form of payment.