The term close escrow is usually used in real estate transactions or purchases that involve property that is of very high value. You are said to close escrow when you complete the transaction. For example, if you are selling a home, you close escrow by transferring the property to the buyer. Though this may sound very simple, there are typically many things that have to happen to close escrow. There are, for example, many documents to sign and verify as well as money that must change hands. Once all of the required documents are signed and recorded and the financial part of the transaction is complete, you have closed escrow.
To close escrow, you'll work with a third party, often called an escrow or closing agent, who is responsible for handling the closing of your transaction. This person is usually a neutral party, which means he does not work for the buyer nor seller. He is responsible for ensuring that the seller receives the agreed-upon amount of money, which is based on the terms of the sales agreement, and that the buyer receives the title for the property. He makes sure the required documents are not only signed and dated, but also that they are signed in the right places. He usually ensures that all the transaction-related paperwork is in order, gives copies of important documents to all of the parties to the transaction, and ensures that the deed and mortgage on a property are recorded in court in accordance with the jurisdiction's laws.
Essentially, an escrow or closing agent's job is to make sure the buyer doesn't receive the property and the seller doesn't receive the money before the transaction is complete and the terms of the sale agreement have been met. To this end, the escrow agent keeps funds and important documents safe until the entire process is complete. You are said to have closed escrow once the closing agent has the deed recorded and the new owner of the property receives the original deed.
You may receive the keys to your property soon after the deed is recorded, though in some jurisdictions the keys are given to the new owner on the day of closing. If you have to wait for the deed to be recorded, you may receive the keys on the business day after this occurs. Interestingly, however, there are some places in which it is standard for the new owner to have a wait of about three days to receive the keys to the property.
