Explaining Escrow
Most people don’t know what escrow means or how it safeguards your transactions in real estate. Here is a quick summary to help you understand what it is and how it will help streamline your real estate transaction.
Once a Seller has accepted your offer, your earnest money will be deposited into an escrow account held by the title/escrow company. Your transaction will now be in ‘ESCROW’. This places the transaction's finances into a neutral party's hands.
SELECTING AN ESCROW COMPANY
This decision is between the Buyers and Sellers and usually I or the other agent will suggest a company that one or both of us have worked with in the past. There are quite a few to choose from and we all have our favorites.
WHAT ARE THEY DOING?
Your escrow company is like a general contractor who bears the responsibility of overseeing the project when building a home. They look at the contract, the offer & acceptance, and make sure both Buyers and Sellers are meeting their requirements. These may include home inspections, purchasing homeowners insurance, completion of negotiated repairs, and financial requirements. There are a lot of documents in buying and selling real estate. Escrow double-checks to make sure all documents are signed and turned in.
PROCESS
Once all the contingencies have been met, the escrow company will have both parties come in and sign documents. This generally happens on the same day but not at the same time. If one party is not available in person, documents can be signed through a mobile notary. I’ve had this happen many times. It is not difficult at all. After all documents are signed, they disburse the funds to the Sellers and other parties, by the contract.
COSTS
The costs of escrow are negotiated in the contract. Usually, it is split among parties but not always. This can lean one way or the other depending on market conditions.
CLOSING
When all of the above is done, the Seller has their proceeds and the Buyer has keys to the house. Time to either relax or start unpacking!
I would like to thank Edwin Velasquez from TRUE TITLE & ESCROW for helping me with the article. He is great at what he does and can be reached at 775.440.1776.
