Whether this is your first home purchase or your fifth, there are simply parts of the process that feel a little fuzzy. One question we at Brighton Escrow frequently hear is, “What is escrow, anyway?”
What Escrow Funds Are
Escrow is a deposit of funds that guarantee the delivery of property from the seller to the buyer upon the completion of the closing.
Why Escrow is Important
It doesn’t’t matter whether you’re buying or selling real estate, escrow acts as your assurance that no money or property will change hands until the entire transaction has been properly carried out. Essentially, the holder of escrow funds is the gatekeeper, making sure that money and documents are carefully safeguarded and will be disbursed to the right party. The seller will receive his funds, and the buyer will receive his property.
How it Works
During the purchase process there are papers signed, promises made. Those papers are delivered to an escrow officer along with any information the officer needs to prepare final documents. Until the deal is actually “closed,” the escrow officer will be the one who holds the entire purchase package in his hands. His duty is to follow the instructions given by the parties involves, to handle funds, pay bills as he is authorized, and to prepare final escrow papers for closing.
In short, escrow protects you as you buy or sell a home, making sure that the proper parties leave with what they were promised.