Escrow 101
It was recently pointed out to me that a lot of people outside the Real Estate industry have never been told what Escrow actually is…
Escrow is a neutral third-party arrangement used in real estate transactions to hold funds and important documents until all conditions of the sale are met.
It (The Escrow Team) acts as a safety net, ensuring that neither buyer nor the seller can access the money or finalize the deal until everything is verified and agreed upon.
This process was invented to provide security, transparency, and fairness.
Escrow Officers
What is the Role of an Escrow Officer?
An escrow officer serves as the neutral facilitator, managing a real estate transaction from start to finish and making sure the transaction is secure, compliant, and completed smoothly. As they work for both parties, their role includes managing the escrow account, verifying documents, tracking conditions, and coordinating the closing.
The Escrow team works for you. You are encouraged to call them any time there is an issue you do not understand, know how to clear up or any stumbling block you anticipate (like a second mortgage your ex partner took out on the home that does not show up on title).
The Steps….
OPENING ESCROW
After the purchase agreement is signed, and escrow account is opened with an escrow company or attorney.
DEPOSITING FUNDS
The buyer places earnest money and later the down payment into an escrow account.
DOCUMENT REVIEW
The escrow officer ensures all required documents – title reports, loan papers, and disclosures – are complete and accurate. If they find an inconsistency, they make sure the error is corrected before closing can move forward.
CONDITION FULFILLMENT
Inspections, appraisals, and any agreed-upon repairs are completed. Any other obligations created in the contract are fulfilled.
CLOSING
Once all conditions are met, funds are released to the seller, and the buyer receives the keys.
ESCROW KEEPS US ALL
ON OUR TOES
AND MAKES SURE WE MAKE IT TO THE FINISH LINE ON TIME.