Escrow is a process that helps ensure a smooth and secure transaction for both the buyer and the seller. The Escrow process involves a neutral third party, known as the Escrow Agent, who holds onto important documents and funds until the conditions of the transaction are met. To ensure a successful transaction, it’s important for both the buyer and the seller to understand the common Escrow terms.
Here are some of the most common Escrow terms:
- Escrow Agent: This is the neutral third party who holds onto the funds and important documents until the conditions of the transaction are met.
- Escrow Instructions: These are the written instructions given by the buyer, seller, and lender to the Escrow Agent, outlining the details of the transaction.
- Escrow Account: This is the account where the funds are held by the Escrow Agent during the transaction.
- Earnest Money Deposit: This is a deposit made by the buyer to show their serious intent to purchase the property. The deposit is held in the Escrow Account until the transaction is completed.
- Title Report: This is a report that details the ownership history of a property and any liens or encumbrances.
- Closing Costs: These are the fees and expenses associated with the transaction, such as the Escrow fee, title insurance, and recording fees.
- Contingency: This is a condition that must be met before the transaction can be completed. For example, a loan contingency requires the buyer to obtain financing before the transaction can close.
- Close of Escrow: This is the final stage of the Escrow process when the transaction is completed and the Escrow Agent disburses the funds and transfers the property to the buyer.
- Recordation: This is the process of legally recording the transfer of ownership of a property with the local government.
- Deed: This is a legal document that transfers ownership of a property from the seller to the buyer.
Closing an escrow is a complex process with many terms that may be unfamiliar to those who are not familiar with the process. Understanding the common escrow terms such as escrow fees, title insurance, county transfer tax, and others can help you have a smooth and successful escrow closing. If you have any questions about these terms or anything related to the escrow process, don’t hesitate to reach out to the experts at Pathway Escrow. They are dedicated to making the process as easy and stress-free as possible. Click Here to learn more about different vesting descriptions.