But what is escrow, and how does it work?
What is Escrow, and How Does It Work?
Escrow is a secure place to store an earnest money check, contracts and other important items until the deal closes.
How Does Escrow Work?
There’s an escrow officer – a third party who makes sure everything stays secure until closing. When you put money in escrow, it’s safe from being given to the other party until the deal closes.
It’s about more than just money. Important documents can be filed with the escrow officer throughout the process, including the home inspection, proof of repairs and other things.
Escrow protects both buyers and sellers. Here’s an example: Say you’re buying a home but you ask the seller to replace the bathtub. During your final walkthrough, you discover that the seller hasn’t replaced the bathtub at all. Fortunately, your money is in escrow; the seller won’t get it until he or she proves that the tub has been replaced.
Here’s another example on the seller side: Say your buyer gets cold feet and walks away from the transaction without meeting one of the contingencies listed in the purchase contract. The buyer forfeits his or her earnest money to you, which is in escrow – the buyer isn’t getting it back after you took your home off the market in hopes of selling it to them.
Are You Buying a Loft or Condo in DTLA?
Call us at 213-254-7626 or get in touch with us online to start exploring your options when you want to buy a loft or condo in downtown Los Angeles.
While you’re here, check out our: