Escrow is a deposit of money, the deed by one party to deliver to another when
the second party completes certain conditions made in the closing. For example,
a buyer may hold back $ 10,000 which is placed in escrow until the seller of
the house puts up a new fence around the property. Once the fence is up then
the seller will get the money from escrow.
Do I need Escrow?
Escrow is a very good thing to have. If you a buyer hold back some money you
really have no assurance that the money that they are holding back will get
paid. If the money is placed in escrow where it is in neutral hands you are
guaranteed to get it.
How does escrow work?
There are 4 people involved in escrow, the lender, the buyer, the seller and
the borrower. There are specific instructions for the seller to follow if they
want to retrieve that money from escrow. An escrow officer will be assigned
to the case, he will be in charge of the money and he will also determine whether
or not the task has been completed.
Who gets to choose the escrow?
The participants of escrow get to decide together who should be the escrow
holder. If you are dealing with a real estate agent then the agent may suggest
an escrow broker . It should be someone that both sides are comfortable with.
What Do I have to do while there is escrow?
All depending on what the terms of the escrow is. If you are the side that
has repairs to make then you want to make sure that they get done in order to
receive the money in escrow.
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