Understanding the Escrow Process: A Guide for Home Buyers and Sellers

For many home buyers and sellers, the escrow process can feel like a mysterious in-between phase—sandwiched between the excitement of signing a purchase agreement and the final moment of closing. But while it may seem like things are happening behind the scenes, both parties have important roles to play to keep the transaction on track.

What Is Escrow?

Escrow begins once the buyer and seller sign the purchase contract and continues until the closing is complete. An escrow agent (or sometimes a title agent or attorney) acts as a neutral third party to manage the terms of the agreement and ensure a smooth transfer of ownership.

During this period, several important steps are set in motion:

• Title Reports & Deeds: The escrow or title agent prepares the property deed and reviews the title to ensure it’s free of legal issues.
  
• Appraisal & Loan Approval: The buyer’s lender arranges for a professional appraisal to verify the home’s value, which is a key step in finalizing the mortgage.
  

Inspections & Contingencies: Buyers typically schedule home inspections, secure insurance, and address any other contract contingencies.

What Sellers Need to Know

While sellers aren’t as involved in every step, their cooperation is essential. You may need to:

• Provide access to the home for inspections or appraisals
  
• Complete and share required disclosure documents
  
• Handle any agreed-upon repairs
  
• Respond promptly to questions or issues that arise
  

Clear and timely communication with your real estate agent can help avoid delays.

Appraisal & Inspection

The appraisal confirms the home’s market value and can impact the buyer’s financing. Inspections, on the other hand, focus on the condition of the property. If major issues are found, buyers may request repairs or renegotiate terms. Sellers who remain flexible and cooperative often reach smoother, faster resolutions.

Addressing Title Issues

Title issues—such as unpaid liens or ownership disputes—can delay or derail a sale. If any problems are uncovered, it’s critical to address them quickly. Your escrow or title agent will guide you through resolving these concerns to ensure a clean transfer of title.

Final Walk-Through & Closing

Just before closing, the buyer typically does a final walk-through to verify that all agreed-upon terms have been met. As a seller, make sure:

• The home is clean and ready for move-in
  
• All necessary repairs are complete
  
• Fixtures and items included in the sale remain in place
  
• You’ve vacated the property, unless otherwise agreed
  

Staying in the Loop

Throughout the escrow process, maintain open communication with your real estate agent and escrow officer. Staying informed, organized, and responsive can make the difference between a stressful experience and a seamless transition.