What is Escrow?

Escrow is essentially what happens when money is deposited by one person with a neutral third party (the escrow officer) so that it can be delivered to another party upon completion of an event.

In the home buying process, escrow opens when the buyer and the seller sign a purchase agreement and the buyer put down a deposit. After escrow opens, the contract, along with any additional instructions, dictates how the process should be handled and what is necessary to complete the transfer. Your escrow officer opens escrow by assigning your escrow an account number and collecting the contract and the buyer’s deposit. Deposits are either applied to the purchase price, or returned should the deal fall through.

Escrow protects all parties involved by making sure that no funds or properties change hands until all conditions in the agreement have been met.

The length is determined by the terms of the purchase agreement and can range from a few days to several months. 30-45 days is the standard timeframe for an escrow when a you need to obtain a loan and you do not have another house to sell.

Once all the contingencies are released, the loan is funded, and the title is cleared, then it is time to prepare for the closing. Escrow closes and the deal is complete when the escrow office records a new deed in your name, the seller gets paid for the home, and all other monies are disbursed.

Life of a 30 Day Escrow - Buyer View


Day 0 - Offer Accepted by the Seller. You are officially “in Escrow”!

Day 1- Contact your lender and start the loan paperwork.

Day 2 - Schedule home and pest inspections if not already completed by the seller.

Day 3 - “Verification of Down Payment and Closing Costs” and Preapproval due to seller. Earnest money deposit due to escrow

Day 4 - Confirm with lender that the appraisal has been scheduled

Day 5 - Think about moving. Are you going to use a moving company or do it yourself? I can help w/ recommen- dations and planning

Day 7 - Seller is required to deliver ALL disclosures and HOA docs if applicable.

Day 8 through Day 12 - We will sit down together and review all of the disclosures and reports. If you feel that there is information obtained in these documents that devalues the house, we can ask for either a credit or a price reduction. Remember, the Seller does not have to agree to your request and you can walk away from the deal at anytime during this period and receive your deposit money back.

Day 13 through Day 16 - Schedule any follow-up inspections or contractor visits. Start shopping for homeowners insurance.

Day 17- Remove physical investigation and appraisal contingencies. Remove HOA contingency if applicable

Day 21 - Remove loan contingency. Once all contingencies are removed the increased deposit is due to escrow Day

28 - Meet at the escrow company for the final sign-off on the loan documents.

Day 29 - The lender sends the value of the loan to the escrow company