Escrow is a legal arrangement in which a third party temporarily holds large sums money or property until a particular condition has been met (e.g., the fulfillment of a purchase agreement). Escrow is an important part of purchasing a home. It protects buyers and sellers during home sales and offers a convenient way for you to pay for your taxes and insurance.

Title insurance is a form of indemnity insurance predominantly found in the United States and Canada which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans.

A prequalification or preapproval letter is a document from a lender stating that the lender is tentatively willing to lend to you, up to a certain loan amount. Sellers frequently require a prequalification or preapproval letter before accepting your offer on a house.

A transfer disclosure statement (TDS) is required by California law in section 1102 of the California Civil Code. This law requires that every residential seller complete a TDS for the buyer. The purpose of the TDS is to let a buyer know of major defects in a property as required by California law.