If you are in the market of buying a home, you probably hear the word “escrow” in a few different contexts. In today's blog, I will review the meaning and how escrow works. 

What is Escrow? 

Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement). Basically escrow is like the middle person between the buyer and the seller and this middle person makes sure all agreements are being followed and met, lowering the risk for something to go wrong. 

How Does Escrow Work? 

Escrow is used in real estate transactions to protect both the buyer and the seller throughout the home buying process. Throughout the term of the mortgage, an escrow account will hold funds for property taxes, homeowners insurance, and other fees. The escrow account is in place until the closing process, and after closing. A house that has yet to be transferred from seller to buyer is considered "in escrow." When the seller of a property accepts an offer from a buyer, the process of escrow begins. This process includes depositing necessary funds, documents, and any special instructions into the escrow account for safekeeping until the closing occurs. The closing cannot occur until both the buyer and seller have met whatever obligations are required of them. This ensures no funds are distributed until everything regarding the sale of the home is in order. An escrow agent is in charge of monitoring progress of the things that need to be done, and facilitating the closing when all obligations have been fulfilled. Once escrow has officially closed, you are now considered homeowners!! 🥳🏡❤️

If you have any further questions, please call, text, or email me! I am here to guide you through the home buying process & I can't wait to get you to the close of escrow on your dream home!😊

(805) 827-0782 email: iris.perez@jhagents.com