What it is:
Escrow is the process where a neutral third party makes sure that all the parts of a real estate transaction are fulfilled.
An escrow company holds the buyer’s deposit as well as the deed to the house until closing. They’ll gather all the documents needed to complete the purchase of a home from legal documents to records of transactions. They are also responsible for distributing funds based on the instructions of the buyer and seller.
How it works:
- After a buyer and seller come to an agreement on the purchase price and sign a purchase agreement, the escrow company steps in.
- The company assigns an Escrow Officer and an Escrow Number. With that, escrow on your the home is officially open.
- The buyer will receive instructions on depositing their earnest money deposit.
- The buyer will make the deposit within three days of an agreed upon contract.
- The Escrow Officer holds and manages all buyer-submitted money during the escrow process.
- They also obtain the deed for the home from the seller.
- After all the terms of the purchase contract have been met, the escrow agent releases funds to the seller and transfers the deed to the buyer.
Related Buyers FAQs
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