Escrow: How Does It Work?
You want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder safeguards the funds and documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
The escrow officer follows the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow (finalizing the sale) only when all terms and funds are in accordance with instructions; and provide an accounting of the same.
Appraisals: Who Needs One?
If an agreement to purchase is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution via third party. This is done so that the lending institution can confirm their investment in your property is accurate.
Most buyers will have the property inspected by a licensed property inspector within the timeframe that was agreed upon in the effective contract to purchase. Some buyers will have several different inspectors inspect the property, if they wish to obtain professional opinions from inspectors who specialize in specific area (eg.roof, HVAC, environmental).