Escrow is a neutral third party that handles the exchange of real property and funds, provides a place to sign on the dotted line, and files to record closing documents with your county. They are often referred to as the “closing agent” as well. Technically, they work for the buyer and seller equally, and are paid for by both parties equally (which is important if you consider that they hold the buyer’s earnest money).
Escrow fees are typically between 0.5% and 1% depending on the purchase price of the home. As the price increases, the fee percentage decreases. As previously stated, the buyer and seller split this fee evenly, but it is not uncommon for the buyer to negotiate with the seller to cover some or all of this fee.
Your escrow company will most commonly be your title company as well. Combining the two offices of title and escrow under a single company is a great way to streamline the process by making communication between the two offices easy and effective.
After signing has been completed and funds have been deposited by either the buyer or lender, the escrow company will organize the paperwork as needed for submission to the county for recording on closing day. The county will provide closing numbers to escrow once the transaction has recorded, at which time the transaction is complete and the buyer can take possession of the home!