If you’re looking for your first home, or just not familiar with the home buying process, one word comes up often that is usually a mystery to many people.
Escrow, in the real estate industry, is a term that refers to a third party hired to handle the exchange of money and documents. When both parties come to a mutual agreement for price and terms regarding the sale of a home, the transaction “enters” escrow. An escrow account is opened to facilitate the transfer of the funds and property.
Without escrow, the buyers and sellers in a transaction would risk losing the title or funds during a transaction since there is no third party to facilitate.
Once the property is ready to “close”, the escrow officer will audit the files for the transaction to make sure everything is complete and the title for the property is ready to be transferred. After everything is in order, on closing day the buyers will receive keys and title to the home, and the funds will be withdrawn from the escrow account and given to the sellers.
If you’re ever unsure about this process, feel free to reach out to me with any questions!