Buying or selling a home can be a risky proposition for all involved. How can you rest assured that your best interests are protected throughout the transaction? Escrow is one method that can help facilitate a smoother closing process, but many people lack a basic understanding of this financial tool. The staff at the First Financial Title Agency of Minnesota offer their Burnsville clients the guidance they need on issues related to home sales and purchases.

The agency also offers reliable escrow services, which are invaluable when you're immersed in the buying and selling process. The following is some basic information regarding escrow, which is essential reading for anyone considering buying or selling a home.

What Is Escrow?

Escrow is the act of entrusting an impartial third party to keep essential items, such as money or ownership documents, until a home sale is complete. The person tasked with holding onto these items can be an agent of a title company, an attorney, or even someone employed by the closing company.

What Happens During Closing?

An escrow agent will also be present for the closing of the transaction. This is the process in which documents are finalized, and money changes hands. At this point, all terms of the agreement, such as home inspections, should have been satisfied. 

How Does Escrow Offer Protection?

Escrow provides protection by ensuring certain tasks are completed before closing. These tasks often include home inspections to guarantee the condition of the house has not changed. In the event that a home has an issue that was not previously discovered, the escrow officer will hold onto the money until the issue is remedied. If the buyers decide at the last minute that they’re no longer interested in the sale, their earnest money deposit will be forfeited to the seller.

What Fees Are Involved?

Escrow does entail some fees, which may be paid by both the buyer and seller, or just one party. In general, the fees associated with escrow will not exceed 2% of the total cost of the home.

What if the Closing Is Delayed?

If there is a delay, buyers and sellers can choose to move forward with the closing without penalty. Rescheduling is permitted in some cases, which provides more time to close the deal without risking forfeiture. In other cases, deposits may be forfeited or claimed by the other party.

If you are in search of a friendly and knowledgeable title and escrow company in Burnsville, look no further than the First Financial Title Agency of Minnesota. Find out more by calling (952) 831-5010, or visit them online to access helpful tools and resources.