First, a little about "escrow". An escrow holder is brought on to assure your place closes on time and the closing process goes smoothly. A home 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 exchange of money takes place. For example, in an online transaction, PayPal is the neutral third party that obtains the buyer's money, and then disburses the money to the seller.
Clearing the final hurdles like receiving funds, signing forms, securing the documents for loans and liens, and making sure you get a spotless title to the home before your purchase gets finalized are all parts of closing in which an escrow holder is useful.
The certificates the escrow company may obtain include:
- Loan 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
Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The home's title gets handed over to you and title insurance begins per the steps of your individual escrow agreement.
The escrow agent receives a payment at the completion of closing. As your REALTOR, I'll let you know what is an acceptable way of paying.