Buying a house is a life changing event, especially for a first time buyer. There may be unfamiliar real estate terms tossed around and the introduction of something unique to the process.
An escrow company (often a part of the title company, like Beaches Title) is a neutral party to the real estate transaction. It does not favor either the buyer or the seller. What it does do is make sure that all the financial and legal bits and pieces are in place. They review the contract for correctness, handle the money, and make sure that all documents are filed properly when the sale closes.
Working with an escrow company begins when a contract is signed and you, the buyer, pay your good faith money. At this point, everything goes to the escrow company and is assigned to an escrow officer, also known as a closer. This person reviews the sale terms and timelines specified in the contract. He holds the responsibility for the smooth flow of the transaction.
Banks aren’t the best option when holding these kinds of funds. They won’t hand you a suitcase full of cash to give to the seller. They want to know that the agreement’s conditions are met. Confirming that is the job of the escrow company. Once everything is verified, the bank holding the new mortgage will transfer the money to the seller through the escrow company’s account.
The money is moved and now it is up to the escrow company to record, or close, the transaction. This means filing the paperwork that shows the legal ownership transfer from the seller to you, the buyer. Once this is done, you are now the legal owner and the property is yours!