When engaging in a real estate transaction, it is important to understand the role of escrow. This third-party service acts as a neutral party to ensure that the terms of the transaction are executed properly. This client handbook to escrow will provide a professional insight into what buyers and sellers should expect from this process.
For starters, escrow will only commence once both the buyer and seller have agreed to the terms of the sale or purchase. Once escrow is opened, the buyer will usually deposit their earnest money deposit into the account. This lets the seller know that the buyer is serious about the purchase and is willing to put forth a non-refundable deposit.
It is important to understand that escrow is not just about holding funds until the closing. There are many other tasks that the escrow officer will carry out. This includes ordering and reviewing title reports, preparing and processing documents, and working with the buyer’s lender to ensure that all conditions for funding have been met.
The escrow officer also acts as a mediator between the buyer and seller. They are there to ensure that all conditions of the agreement are met before any funds are released. This includes verifying that any required repairs have been made, any liens or encumbrances have been cleared, and that all necessary disclosures have been provided.
Once all conditions are met, the escrow officer will then distribute funds accordingly. This includes disbursing funds to the seller for the sale price, paying off any mortgages or liens on the property, and paying the real estate agents for their services.
In conclusion, having a basic understanding of escrow can help buyers and sellers navigate the real estate buying and selling process with ease. Escrow provides a neutral third-party service that ensures that all terms of the transaction are met before any funds are released. If you have any questions about escrow or your specific transaction, be sure to ask your real estate agent or escrow officer for more information.