What Exactly Is Escrow—and Why Does It Matter?
You’ve found the perfect home (or the perfect buyer), the offer is accepted, and everyone is excited to move forward. Then someone says, “Now we’re in escrow,” and suddenly, things start to feel a little less clear.
If you’re like most of my clients, this is the part where questions come up: What does escrow mean? What’s happening behind the scenes? When do I get the keys—or the check?
Don’t worry. Whether you’re buying or selling, this post will walk you through exactly what happens during escrow—so you can stay informed, prepared, and calm from start to finish.
What Is Escrow?
Escrow is the period of time (typically 30 to 45 days) between an accepted offer and the official close of the real estate transaction.
During this time:
- A neutral third party (usually a title or escrow company) holds all the funds and important documents
- The buyer and seller each complete specific tasks laid out in the contract
- The home changes hands legally and financially
It’s a behind-the-scenes process—but it’s one of the most important parts of a real estate transaction.
What Happens During Escrow?
Here’s a simplified breakdown of the steps that happen once escrow is opened:
1. Earnest Money Deposit
The buyer submits a deposit (usually 1–3% of the purchase price) to show serious intent. This money is held in the escrow account and applied to the final purchase.
2. Disclosures and Inspections Begin
The seller provides legally required disclosures about the property’s condition. The buyer typically schedules inspections—home, termite, roof, and more—depending on the contract.
3. Appraisal Ordered
If the buyer is using a loan, the lender orders an appraisal to confirm the home’s value matches the price.
4. Loan Finalization (If Applicable)
Buyers work with their lender to finalize the mortgage, submit final documents, and secure approval.
5. Repairs and Negotiations (If Needed)
If inspections uncover issues, buyers may request repairs or credits. This step involves negotiation, and I’ll guide you through it to keep things on track.
6. Title Review and Escrow Instructions
The title company reviews ownership records, checks for liens, and prepares the legal documents. Escrow instructions are signed by both parties.
7. Final Walkthrough
Typically done 1–3 days before closing, the buyer walks through the property to make sure it’s in the agreed-upon condition.
8. Signing Day
Both parties sign final paperwork—buyers sign loan documents, and sellers sign the deed. This can take place in person or remotely, depending on the situation.
9. Funding and Recording
Once everything is signed and approved, the lender funds the loan (if applicable), and the title is officially recorded with the county. The transaction is now legally closed.
10. Keys (or Proceeds) Delivered
Buyers get the keys, and sellers receive their funds. Congratulations—escrow is officially closed!
Roylin’s Take: Why This Process Matters
I always tell my clients: escrow is about protection. It ensures that everything promised in the contract is carried out fairly before the home and money officially change hands.
When things get confusing, I’m here to explain each step in plain English, flag potential red flags, and keep your transaction moving smoothly.
A Few Quick Tips for Buyers and Sellers:
For Buyers:
- Stay responsive to your lender and escrow officer—timing matters
- Don’t make big financial changes (like buying a car) during escrow
- Ask questions—you deserve to understand every document you sign
For Sellers:
- Be proactive with disclosures and repairs
- Have your documents ready, including mortgage payoff info
- Plan your move-out timeline based on the contract
Let’s Get You Through Escrow with Confidence
Buying or selling a home is exciting—but the details of escrow can be overwhelming without the right guidance. I’m here to make sure you’re never left wondering what’s next or who’s responsible for what.
If you’re preparing to buy or sell, let’s talk through what to expect and how I can help you feel confident from offer to close.
