What is escrow?
When you're a homebuyer, you want to make sure the process goes perfectly
and that means understanding what escrow means for you and how it works.
When you have a Diego's group agent to help you, the process goes smoothly.
As a California first time home-buyer, escrow may seem intimidating
but it really is not. The word ‘escrow’ in real estate can be used to describe 2 things:
In this article, I will be covering what escrow is and how it works for the homebuyer.
What is the home-buying escrow process?
Involving an escrow agent or service in a real estate transaction is critical. During the real estate process, there are many things an escrow officer can help you do:
They protect and minimize risk in a real estate transaction
They safeguard important documents, funds, and additional information needed to finalize the transaction
Constantly makes sure the conditions are being met prior to closing
Escrow helps sellers and buyers
make sure that their conditions are met
and their assets are safe.
How does the escrow process work?
In a real estate escrow process, a trusted third party, such as an
escrow company, receives and keeps real estate documents, funds,
or other valuables from 2 parties of a real estate transaction until certain
conditions are met. When the conditions are met, documents, funds and
property ownership is transferred to the principal parties, and escrow closes.
Get more helpful articles delivered to your inbox
What are the escrow steps?
The process begins when principal parties write out, sign, and deliver
the terms by which escrow will be held. Some escrow services require
a deposit, or escrow fee. The escrow officer will review the parties'
information, lending, title and service provider information.
Then, the officer prepares escrow instructions and sends to parties for signature.
The escrow officer then follows the instructions on what and when to do something in relation to the transaction.
I will give you a sample scenario:
Imagine Jerry and Kimmy. Jerry lists his home on the market with a Diego's group agent.
Kimmy is looking for a house and views Jerry's property. Kimmy is ready to buy but wants
to make sure the house will pass inspections with flying colors beforehand.
Jerry and Kimmy agree to open escrow on terms that the house must pass
inspections for Kimmy to close on the house. Both parties then gather any
important files, lending information, purchasing agreements, amendments and addenda,
and deliver it to the escrow service or company.
From that point on, the officer is in charge of making the transaction close.
When the terms are met, ownership is transferred to Kimmy, funds are transferred to Jerry and escrow closes.
Escrow allows for a trusted third party to safeguard
the important documents and funds of two main parties.
This ensures that both seller and buyer have lowered risks
when dealing with real estate transactions.
How long does escrow take?
The length of the escrow process depends on the buyer and seller.
On the purchasing agreement, the buyer lists their desired closing date.
On the closing day, as the buyer, you are going to sign a lot of documents
but it is up to the escrow officer to send in the signed, notarized deed to the county recorder, and notify the buyer’s agent.
Your DRE group real estate agent can help you find the most trusted escrow services in the area.