First, a little about "escrow". To close 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. PayPal is a good way to picture an escrow company.
The escrow holder makes sure that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finished. This includes securing monies and documents, finishing required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a clear title to your property before the negotiated price is fully paid.
These are the legal documents that escrow companies usually look for:
- 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
Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. Title to the home is then given to you as new owner and correct title insurance is issued as noted in the escrow instructions.
At the close of escrow, in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form of payment.