Escrow in Real Estate: Benefits and How It Works

You may be familiar with the term “escrow” if you’ve done real estate purchases before.

In case you haven’t, we’re here to help.

What is Escrow?

Escrow is a financial arrangement in which two parties enlist a “third party” (who is neither the buyer nor the seller) to temporarily hold money, paperwork, or other assets for a transaction on their behalf before such transaction finishes.

That third party is known as an escrow provider. It helps make the transaction safer by protecting the assets of the buyer and seller.

This happens until both parties have met their obligations for the agreement.

Ideally, the service provider is a neutral third party who isn’t concerned with whether the buyer or seller comes out ahead.

Looking for a trusted provider? Visit Secure Title’s Website

Escrow is commonly used when you buy or sell a home.

It opens when a signed agreement is delivered to an escrow officer, who ensures that the conditions of the contract are all satisfied.

For example, the officer might verify that home inspections, disclosures, and objections are completed or resolved on time.

Ask your real estate agent about the best escrow provider.

How Escrow Works

The provider’s responsibilities in a transaction include receiving assets from one party, disbursing funds according to the terms of the agreement, and closing.

Their role in the transaction safeguards the assets of buyers and sellers before they get transferred from one party to the other.

Of course, given the ample assets at stake in big transactions, you should use a trusted provider.

Your real estate agent is able to recommend a big-name provider.

Do your due diligence and search for the company online with the word “complaint” to dredge up any negative reports.

Likewise, check to see if the provider must be licensed in the state in which it operates—and then confirm that it is licensed.

Recommended read: Buyer’s toolkit


SECURITY: Parties are ensured that payments are made only when the conditions
set forth in the Escrow Agreement are met.

EFFICIENCY:  Funds are managed and disbursed in a timely manner and according to the written instructions received by the parties.

CONFIDENTIALITY: Information is handled for consumer privacy according to local laws/regulations.

TRANSPARENCY: Documents pertaining to the transaction can be requested by the involved parties at any point in time.

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