What Is Escrow?
Most parties enter the escrow process with little or no understanding of what it is or what to expect. The dictionary will tell you that an escrow is defined as a secure and neutral holding place for the documents and funds that are used to complete the transfer of real property. That secure and neutral holding place is your escrow officer who acts much like the hub of a wheel, bringing together all the pieces of your transaction by managing the complex web of documents and funds. The goal of a good escrow officer is to move the parties smoothly, comfortably, and securely through the process and, in the end, to provide the Seller with a check and the Buyer with a deed to his new home.
In more technical terms, the escrow holder acts as an impartial third party who is entrusted with the safekeeping of the documents and funds until all of the conditions of the contract have been fulfilled. This means that your escrow officer is an unbiased party who can be trusted to assist you through the process with neutrality. The Buyer and Seller give the escrow officer written instructions that define the terms and conditions under which he or she is authorized to distribute funds and record legal documents. Most Buyers and Sellers feel a bit of anxiety as they begin the escrow process. The excitement of finishing the sale negotiations and signing the contract quickly gives way to stress as the parties enter the uncharted waters of the escrow process. Your escrow officer, real estate agent, and perhaps your mortgage broker will be your guides as you move through this process. They recognize that for most people, buying and selling a home is the largest single monetary transaction they will ever experience.