Escrow. If you’re new to real estate, the word can be a bit of a mystery. But as you’ll soon see, escrow is an important part of the real estate purchase process.
What Does It Mean When A House Is “In Escrow”?
Escrow is officially defined as a deposit, fund, or document held in the trust of a third party, taking effect only when a specified condition has been fulfilled.
Why Is Escrow Needed?
Escrow functions as the secure place to hold the critical items involved in your transaction – generally cash, securities, property, or other assets. Escrow protects all parties to ensure no funds or property are exchanged until all appropriate conditions for the sale have been met. Escrow is also an indication to the seller that the buyer is capable of making full payment.
In real estate, assets are deposited into an escrow account with the company specified in the purchase agreement. The escrow company could be part of the mortgage lender, or it could be an independent third-party.
The infographic below illustrates a typical Escrow process.
Escrow of the West Protects Seller And Buyer
Escrow of the West operates as an independent escrow company, operating as a third-party in your home buying or selling experience, safekeeping assets and serving as an impartial member of the transaction.
The buyer places money in escrow in exchange for the seller taking the home off the market during the inspection and mortgage application process.
And, by receiving escrow money, a seller agrees to no longer show the property to other potential buyers or accept a competing bid. Escrow funds are non-refundable, so if the buyer backs out, these funds act as a semi-consolation prize.
Don’t trust your escrow to just any company. There are differences – in service, security, accuracy, and knowledge. Having an experienced, client-centric escrow company can facilitate the process and minimize stress.
We invite you to learn more about Escrow of the West at escrowofthewest.com or call us at 866-444-5560.
