Escrow Frequently Asked Questions

What is escrow?

Escrow is a neutral third party that facilitates the home-buying process, ensuring all conditions of the transaction are met before funds and property ownership change hands. Escrow handles transaction documents, verifies requirements, resolves title defects, processes payments, and records the final transfer of ownership.

Why does one need escrow when buying or selling a home?

Escrow provides security for both buyers and sellers by ensuring that all terms of the purchase agreement are met before the transaction is finalized. It protects both parties from fraud, title defects, and other potential risks by holding funds and important documents until everything is in order.

What does escrow do during a real estate transaction?

Escrow is responsible for:
-Preparing and managing transaction documents
-Holding funds securely until all conditions are met
-Clearing unacceptable title defects or claims
-Processing payoffs and disbursements
-Obtaining approvals, reports, and required documents
-Responding to lender requirements
-Prorating insurance, taxes, and rents
-Facilitating document signing and closing

When does escrow officially close?

The escrow process is complete when the new deed is recorded with the county, which officially transfers ownership from the seller to the buyer. Once recorded, funds are disbursed, and the transaction is finalized.

How long does the escrow process take?

The length of escrow varies, but in , it typically lasts 30 to 45 days, depending on financing, inspections, and other contingencies. Some cash purchases may close faster, while complex transactions can take longer.

Who chooses the escrow company?

The buyer and seller negotiate the escrow provider, but in most cases:
In Arizona, the buyer typically selects the escrow company.
In Texas, the escrow company is often chosen by mutual agreement and designated in the contract.

Do I have to be present to sign escrow documents?

No, escrow can facilitate remote signings or mobile notary services if needed. However, certain documents, such as the final deed transfer, may require notarization.

How does escrow protect my money?

Escrow securely holds your funds until all conditions of the contract are met. This prevents fraud, ensures obligations are fulfilled, and protects both parties from financial loss.

FAQs

Escrow –
Common Questions