At its very basic, an escrow is something of value – money or documents, for example – that is held by a third party until the conditions of an agreement are met.
In real estate, escrow opens when you make an offer on a house and it is accepted by the sellers. You will write an earnest money check, and that will be held in escrow while the process takes its course. The escrow also includes important documents related to the transaction. The escrow is managed by a neutral third party – someone who has nothing to gain or lose from your home purchase. This person is called an escrow agent, a title agent, or a closing attorney – that’s us!
The title agent will manage the process, taking care of everything from ordering the title search to giving instructions to the various parties involved in the sale. They’ll schedule your closing, and after closing, make sure the funds are distributed to the appropriate parties and ensure that paperwork is filed with the county. When all of that is done, the escrow will close.
Your lender will also set up an escrow account to hold funds for annual payments of taxes and homeowner’s insurance.