If you’re like many Americans who are in the process of buying a home, you may ask yourself: what is escrow and why do I need it? Well, quite simply, an escrow account protects all parties involved. Whether you’re the seller or the buyer, you want to be assured that no funds are transferred until all stipulations of the transaction are met. This provides both parties with the reassurance that’s necessary when completing large or important transactions.
Escrow is an agreement in the form of a contract, deed, bond, or other written legal arrangement where funds are put into the custody of a neutral third party until specified conditions are fulfilled. The escrow agent then delivers the asset upon completion.
When the escrow process is complete, the escrow service records the new deed in the buyer’s name, which finalizes the transaction.
The need for fair and objective transfer of property is more important than ever in today’s world. The escrow process provides the peace of mind necessary when transferring valued property.