Escrow is a vital part of selling a home. Whether you are approaching it as the buyer or the seller, you should understand what happens during this time and how it can impact the process. Your real estate agent can help guide you through it for a smooth closing. Here’s what you need to know.

An Introduction to Escrow in Selling a Home

What Happens to the Money?

When a seller accepts an offer on a home, the buyer writes an earnest money check. They then place these funds into escrow, which means that the money doesn’t go directly to the seller. Instead, it goes to an impartial third party who holds onto the funds until the buyer and seller finalize all details and close the sale. When this happens, the escrow officer oversees the final paperwork and handles the exchange of funds. They ensure that everyone holds up their end of the bargain before finalizing it. If the deal falls through, they either refund the money to the buyer or forward any forfeited funds to the seller.

This process benefits both parties when buying or selling a home. It protects the seller because they know that the buyer is serious about the purchase. The buyer is protected because, if they cannot come to terms with the seller, they know the seller doesn’t already have their money.

What Happens During the Escrow Period?

Much happens while the property is in escrow, as this is when the details become finalized. The buyer may want to schedule inspections for the property and renegotiate the purchase terms based on what they uncover. The seller should release all disclosures and may wish to confirm the buyer’s financial fitness for their offer.

As you approach buying or selling a home, have someone on your side who understands the complex process. Justyna Johnson – ExP Realty is a top Realtor® in Woodbury, MN, and the Greater St. Paul area. She has been recognized as a 5-Star Premier Agent on Zillow for her high level of customer service. Learn more online about selling, and call her at (651) 501-2345 with any questions. Plus, get a personalized TRUSTimate — an accurate, free online property report — when you text HOME to the same number. You will receive no calls, spam, or sales communications if you do so.