Updated 8 months ago ​by Aneesah Emeka

What it is: 
Escrow is the process where a neutral third party makes sure that all the parts of a real estate transaction are fulfilled. 

An escrow company holds the buyer deposit and deed to the house until closing. They'll gather all the stuff needed to buy a home from legal documents to recording transactions. Then, they distribute funds based off of buyer and seller instructions. 

How it works: 

  • After a buyer and seller sign & agree on an offer contract,  the escrow company takes over.
  • The company assigns an Escrow Officer and an Escrow Number – and escrow on your new home is officially open. 
  • The buyer will receive instructions about how to deposit their earnest money deposit
  • The buyer will make the deposit within three days of an agreed upon contract. 
  • The Escrow Officer holds all buyer-submitted money.
  • They also secure a deed from the seller. 
  • After all the terms of the purchase contract have been met, the escrow agent releases funds to the seller and transfers the deed to the buyer.