There is some confusion, especially among first-time home buyers, regarding exactly why there is this thing called an escrow. What is it? What does it do? Why is it necessary? Why can’t I just get my home purchase offer accepted and then move in the next day?
Buying a home is practically unlike buying anything else in your lifetime. There are a lot of issues surrounding a home purchase that involve insuring that both the buyer and the seller are in complete agreement as to the negotiation they finally settled upon. In that agreement, there are local, state, and federal laws that govern the purchase of real property.
Investopedia defines escrow this way:
“An escrow account can be used in the sale of a house, for example. If there are conditions to the sale, such as the passing of an inspection, the buyer and seller may agree to use escrow. In this case, the buyer of the property will deposit the payment amount for the house in an escrow account held by a third party. This assures the seller – in the process of allowing the house to be inspected – that the buyer is capable of making payment. Once all of the conditions to the sale are satisfied, the escrow transfers the payment to the seller, and title is transferred to the buyer.”
So what does all this mean? In a nutshell, escrow makes sure that all conditions of the purchase agreement are met by the buyer and the seller. The transaction does not close until these conditions are met, and the escrow officer assigned to your transaction helps both buyer and seller make this happen. An easy explanation, right?
So what is escrow doing to make sure your transaction goes accordingly? All paperwork, purchase contract, counter offers, addendums and agreements, as well as funds deposited in good faith, are kept in escrow and monitored to make sure that all contingencies of the sale are met. Being an objective third party to the transaction makes sure that fairness in the process is adhered to by both buyer and seller.
Along with the escrow officer, I follow the transaction to make sure that my obligations to the process are met. Items such as the home inspection and subsequent requests for repairs, appraisals, and making sure your contingency deadlines are met are just a few of the things I do to help you through the process. I am also here to answer any of your escrow questions at any time through the close of your transaction.
What questions do you have about the escrow process? How can I help? Contact me and I will give you the straight scoop, no strings, no obligation.
Keller Williams VIP Properties
25124 Springfield Court Suite 100
Valencia CA 91355
Toll Free: 800-891-6415