Escrow, or what we like to call, ”limbo”, is something that you should prepare for in any attempt to purchase a home. At times, purchasing a home can feel extremely nerve-wracking. There may be times in the process where you don’t understand what is happening. One of the most misunderstood and overlooked steps in the purchasing process is Escrow. Let’s discuss what escrow is, and what to expect.
What is Escrow?
Zillow defines escrow as a time in a purchase when an impartial third-party keeps something of value during a transaction. As it relates to real estate, escrow is basically a financial instrument where a third-party holds onto everything in an account until the sale closes. The purpose of the escrow account is to keep both parties (buyer and seller) neutral throughout the sale.
What Happens During Escrow?
One thing to note about escrow is that every process varies in length. A major roadblock that may lengthen the time of escrow directly relates to not having pre-approval for a mortgage loan. Escrow is known to be a daunting experience and there may come a time when you question “umm...excuse me, where is the money that I paid with for this house?” It is important to remember that you, as the buyer, should leave the sale just as satisfied as to the seller. Escrow holds onto all items to ensure the sale is finalized between the two parties with zero financial conflicts where both have actioned all items of their contractual agreements.
How Are Escrow Accounts Opened?
Once you make an offer on a home to a seller, the check you write will go directly into an escrow account. The funds will be deposited into the account by the agent (that’s right, we do the interfacing for you!) This part is important because you don’t want the seller to hold onto the money. The could easily provide a verbal commitment to depositing the check-in an escrow account when instead they keep it and ploy you out of their contractual obligations.
The Bottom Line
Escrow is a natural part of the sales process when buying a home. Sure, experiences may differ from buyer to buyer, but know that everyone will experience some type of escrow. Your agents are there to support you and guide you through contractual agreements with the seller. Your agents will understand and validate your uneasiness as you hand over your earnest check when making an offer for your dream house. At the end of the day, escrow is actually a positive aspect of the process as it safeguards your money and the state of your new home when you move in.
We hope that everyone is staying safe and healthy during this historical time in our lives. The Shaffer Team consists of real estate professionals in Southern Utah, specializing in selling homes. We work with talented photographers, stagers, and lenders to ensure your home buying or selling process is efficient and smooth. We are committed to keeping you informed through the entire sales process and educating you on anything you may not understand. Call us to learn more about the area and to understand how we can help you find your dream home at 435-525-0079.