In Escrow

What is 'In Escrow'?

In the world of financial transactions, in escrow signifies an item’s temporary condition, such as property or money being transferred to any third-party. Usually, this transfer is made on behalf of a seller or a buyer.

So, basically, in escrow is a legal holding account for such items that cannot be released until specific conditions have been fulfilled. Generally, items get held in escrow until the procedure of financial transaction is completed. Some of the valuables that are held in escrow are securities, stocks, money, and Real Estate.

Explaining In Escrow

Most commonly, escrowed items are found in the transactions of real estate. The title to the property, cash, or the real estate is generally held in escrow until all of the predetermined terms and conditions mentioned in the agreement are met. And then, the ownership transfer takes place.

In an escrow agreement, the terms and conditions between the involved party and the responsibilities of both the parties can be found. Items placed in escrow get regulated by an escrow agent.

This agent, who is generally a lawyer, holds the assets until fulfilment. Once the agreement gets satisfied, the escrow agent then releases the property or funds to the appropriate person or the party.

Property In Escrow

Until the property has been held in escrow, the purchaser is not allowed to occupy or take possession of that place. Real estate deals should clear the series of stages that are formed during the process of escrow.

Below-mentioned is the list of these stages that both the seller, as well as the buyer, has to go through.

• Appraisal: The appraisal must be conducted before selling the property as issues may occur if the property’s appraised value turns out to be lower than the agreed amount.
• Home Inspection: A buyer must get the home inspected to find out problems and dents that were concealed. This helps make the right decision.
• Financing & Insurance: A sale wouldn’t be completed until the buyer has got financing and insurance to pay back the entire amount.
• Title Search: Before buying the house, the title search is performed, which includes checking the public information and records to comprehend the property’s ownership.
• Zoning: The seller must check the zoning before selling the property as the buyer may use it for the purpose that doesn’t match the zoning rules & regulations.
• Repairs: All of the repairs must be done before the buyer pays the money and gets the property.