Understanding Escrow: The Basics

Escrow. Many people know the word, perhaps not nearly as many know what it really means. I'd like to help alleviate some of the stress of buying or selling a home or property by helping to clear up the confusion and unease about going into Escrow. This will be the first post of many going over the logistics of Escrow, and I'll be putting it into terms that I'm hoping will be easily understood by everyone, not just a seasoned real estate agent!

The literal definition of Escrow is as follows:

    A contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the grantee or promisee on the fulfillment of some condition.

Because buying and selling homes are huge transfers of property, there needs to be a secure third party involved to hold all valuables and information until all the terms of the contract on both sides have been fulfilled. That is what is being done when you "go into Escrow". You are acknowledging that you and the other party have come to a tentative agreement and you would like to formalize that agreement and proceed to the eventual transaction.

You can pick the Escrow company yourself, rely upon your real estate agent, or negotiate with the other party on which company to use. Your agent, as always, will have a lot of great advice on which company to go with. Feel free to ask any and all questions, it's important for you to feel confident and informed during the whole buying and selling process.

Have a question? Leave me a comment, and I'll answer as soon as I can.

~ Kelly