What is Escrow?
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being completed. This includes getting payments and paperwork, completing required forms, and seeking out the release documents for any loans or liens that were cleared with the transaction, assuring you have a clear title to your home before the negotiated price is fully paid.
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 paid out. The house's title is given to you and title insurance is issued per the policies of your individual escrow process.
When closing is done, you'll submit a payment to the escrow holder. As your real estate agent, I'll let you know what is an acceptable way of paying.
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Now you know more about being in escrow. And, you can be a smarter home buyer and future homeowner.