The Escrow Process Explained

Escrow is a critical step in a real estate transaction that protects both the buyer and the seller. It ensures that all conditions of the sale are met before money and property officially change hands.

1. What Is Escrow?

Escrow is a neutral third-party process where funds and documents are held until all terms of the purchase agreement are completed.

2. Opening Escrow

After the seller accepts the buyer’s offer:

• The buyer deposits earnest money

• The escrow company is selected

• The official escrow timeline begins

3. During the Escrow Period

Several key steps happen:

• Home inspection

• Appraisal

• Loan approval

• Title search

• Insurance verification

• Negotiations for repairs, if needed

Escrow typically lasts 30 to 45 days, depending on financing and contract terms.

4. Title and Clear Ownership

A title company ensures the property has no liens, unpaid taxes, or legal claims that could delay the sale.

5. Final Walkthrough

Before closing, the buyer completes a final walkthrough to confirm the home is in the agreed-upon condition.

6. Closing Day

On closing day:

• Final documents are signed

• Funds are transferred

• The deed is recorded

• The buyer receives the keys

Why Escrow Matters

Escrow protects both parties by ensuring no one is at risk. The seller does not transfer ownership without payment, and the buyer does not release funds until all agreed conditions are satisfied.