Buying a house is a complicated process. Escrow makes it even more difficult to understand. It’s one of those words that’s thrown around a lot in the real estate world and everyone acts as if the buyers and sellers should understand it perfectly. The fact is, most people who are buying or selling a house have no idea what escrow is and no one is making a move to tell them.
This is a bad practice for those in the real estate industry, because understanding escrow is so crucial to understanding everything about buying or selling a house. Without a thorough understanding of escrow, it is easy to make costly mistakes in your transaction. Whether you’re buying or selling, you need someone to guide you.
Strictly speaking, escrow is an arrangement made between the buyers and sellers of a property where they entrust money to be used in the transaction to a third party. The third party disburses the money as needed throughout the transaction until the property is sold. Escrow money can also be money held in trust by a third party after the transaction is complete. In these cases, escrow money is usually held for the buyer to pay homeowner’s insurance and property taxes.
Of course, this is just a brief overview of escrow. There are a lot more fine details that can come up, and every transaction that uses escrow is unique. If you have any questions about escrow that you need answered in the Hermosa Beach, California area, contact Brighton Escrow.