Final answer:
The topic addresses the agreement on closing fees between a buyer and seller in a real estate transaction and the role of escrow in handling home insurance and property taxes.
Step-by-step explanation:
The question pertains to the terms agreed upon by a buyer and seller regarding the payment of closing fees during the purchase of a home. The agreement on closing fees is a crucial part of the real estate transaction process, and it determines who is responsible for covering these costs, whether they will be paid by the buyer, the seller, or split between the two parties. These fees can include title searches, title insurance, attorney fees, transfer taxes, and more.
Escrow, on the other hand, is a financial arrangement where a neutral third party holds and regulates the payment of the funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met as overseen by the escrow company. An escrow account can also be used to pay recurring expenses like home insurance and property taxes as part of the monthly mortgage payment.