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Lot Size10,019 sqft
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Home Size3,925 sqft
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Beds5 Beds
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Baths4 Baths
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Year Built2005
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Days on Market5
Everything You Need to Know About Escrow
- Real Estate Tips
- February 22, 2022
Looking to purchase a home this year? You may hear some words you aren’t familiar with. “Escrow” is likely one of them! Let’s take a look at what escrow is and how it is used during the home buying process.
What is Escrow?
In the real estate market, you may hear many terms you aren’t accustomed to. The word escrow simply refers to a legal arrangement during the home buying process. This arrangement is from a third party, where they will temporarily hold money/property until a condition is met. Typically, this condition is the fulfillment of a purchase agreement. Escrow is usually used in real estate transactions to protect both the seller and the buyer during the home buying process.
How is Escrow Used in the Real Estate Market?
Escrow is used in the real estate market for two main reasons:
- Escrow will hold a homeowner’s funds for property taxes and homeowners insurance.
- It is also used to protect the buyer’s deposit, so the money will end up in the right hands (as stated in the condition of the sale).
When you are purchasing a home, your agreement can often include a good faith deposit. This can show a seller that you are serious about purchasing a home. If the purchase is successful, it will be applied to the downpayment. If the purchase is not successful due to the buyer’s side, the seller will usually keep the money.
This is where the term escrow comes in. An escrow account will protect both the buyer and seller to hold this deposit. The deposit will sit in this account until the transaction is closed.
Who Manages the Escrow Account in the Real Estate Market?
Typically, a third party will manage the escrow account. This includes escrow companies, an escrow agent, or even a mortgage servicer. It all depends on your needs as a homebuyer.
Ask a Real Estate Agent in Encinitas
If you have questions about escrow and the next right steps, you can easily ask a real estate agent in Encinitas! Whether you are buying or selling, work with the #1 Realtor in Encinitas.
