I'm in Escrow, Now What?

Let's start with the basics. Escrow is a financial arrangement where a neutral third party (usually an escrow company or an attorney) holds money and documents on behalf of the buyer and seller during a real estate transaction. This period typically begins once you've signed the purchase agreement and continues until the deal is finalized.

The average escrow time is 30 days, but this is negotiated between the seller and buyer. Some factors that can affect the escrow period include the complexity of the transaction, the availability of funds, and the responsiveness of the parties involved.

Congratulations! You're in escrow! This is a major milestone in the homebuying process, and it means that you're one step closer to owning your dream home. But what happens now?

Here's a detailed step-bypstep guide to what to expect during the escrow process:

5. Contingencies:

Most purchase agreements include contingencies that allow you to withdraw from the deal without losing your earnest money if specific conditions are not met. These may include financing, inspection, or appraisal contingencies. Make sure you understand these contingencies and adhere to their timelines.

6. Closing Costs:

Be prepared for closing costs, which can include various fees such as lender fees, title insurance, escrow fees, and more. Your real estate agent can help you understand these costs and ensure you have the funds ready for closing.

7. Final Walkthrough:

Before the closing day, it's customary to conduct a final walkthrough of the property to ensure it's in the agreed-upon condition. This is your last chance to identify any issues.

8. The Closing:

The big day has arrived! At the closing, you'll sign the necessary paperwork, including the deed and mortgage documents. You'll also receive the keys to your new home. Congratulations, you're officially a homeowner!

9. Post-Closing:

After the closing, the escrow company will record the deed with the appropriate government agency, and your lender will disburse the funds. You'll receive a closing statement detailing all the financial transactions.

It is important for buyers to be aware of these common mistakes and to take steps to avoid them during the escrow process. By being prepared and staying organized, buyers can increase their chances of closing on their dream home on time and without any surprises.

Changing jobs, making large purchases, opening new lines of credit, missing payments on existing debts, and making major changes to the property can all lead to buyers falling out of escrow. These mistakes can raise red flags with lenders, damage credit scores, and delay the closing process, potentially resulting in the buyer losing their earnest money deposit and the deal falling through.