There are some scary terms that come with buying or selling a home… Escrow is one of them. The word probably goes straight over your head, as it did mine before I got into Real Estate.
The good news: Escrow isn’t as scary as it sounds. It is actually super useful when buying a home. It is essentially a financial took that allows you to set aside items, such as the Earnest Money Deposit check and the purchase agreement document, in an impartial holding area, where it will stay until all the small details are working out between the buyers and the sellers.
The third and impartial party is the escrow officer. In Nevada, the escrow officer is someone from your title company.
How it works:
Your title officer will make sure everything during the closing process goes smoothly, that includes the money and sensitive documents. Escrow protects all parties by ensuring that money and property only are exchanged when the agreement has been met. The home buying or selling process take a while, along the way he escrow officer will file all the documents and make sure everything is on schedule. Your Realtor will be checking in with them as well. Home inspections, repair costs, appraisal costs, etc: Contingency’s that are part of the process. Once each contingency is met, the transaction moves forward. Your escrow officer is the one who is pushing it along, making sure everything is on track. Once all the conditions of the contract are met, the deal is finalized and the money due to the sellers is transferred to them. The escrow officer records the title, and the buyers officially own the home.
How it helps you:
Escrow might seem confusing or a hassle, but it really is for the best. Let’s say the home inspection came back and said the plumbing needed repairs. The seller agrees to fix the problem. But when the buyer goes to do the final walk-through, the plumbing issue wasn’t fixed… Escrow ensures that the seller won’t see a dime until the problem is fixed. Cool huh?
Sellers benefit from escrow too! What if the buyer backs out last minute? Escrow ensures that the seller will receive the Earnest Money Deposit.
Escrow is there to keep everyone safe as they move forward in the transaction. Odds are, no one is trying to steal or trick anyone… but its good to now if something does go wrong, escrow will be there to cushion the fall.