As real estate agents, you should be able to know every complicated real estate terms out there. There are many unreal terms that may throw you off as you deal with a client or make a transaction. One of which is the term ‘escrow.’
Escrow is a word in real estate that refers to the third party account that handles the finances on behalf of two parties while in the midst of a transaction. The two parties in this situation are the buyer and the seller. Escrow accounts are performed in real estate situations to assure both parties that each one of them will do their part until the closing of the agreement arrived. For example, the buyer wants to hold a home inspection before the payment was given to the seller. The holder of the escrow account will not release the funds until the conditions are satisfied.
As the real estate agent, it is under your care to make sure that the escrow account is safe and that both parties will be able to meet in the middle. Sometimes, it’s the real estate agent who handles these type of accounts. Be prepared just in case this situation pop up. Below are some of the things that you have to remember when handling an escrow account.
The process
How does the process of escrow work? The first thing that happens is calling up an escrow officer. After that, the real estate agent will provide important details to the escrow officer about the transaction. Remember that everything should be written in a legal paperwork. The officer will now be the one’s who’s going to handle the finances and the authorization of the principals.
After this, the agent and the principals should wait for the bank’s appraisal of the property to see how much the overall amount of the property would cost. Also make sure that the client already secured a preapproved mortgage before the purchase agreement has been sealed. After this, an agent should always check if the necessary demands between the two parties are executing well. If everything is in accordance then it’s time to close the escrow and seal the deal.
How to find a good escrow officer?
Say your client wants to get an escrow officer. How would you find someone who’s trustworthy enough? What you should do is to find someone who’s an expert in home buying and has done escrow accounts for real estate before. Do not look outside the real estate contact list since the escrow officer that you have to look for should be also inside the business.
Real estate agents are the one who needs to oversee every transaction when dealing with an escrow account. Do not forget to always familiarize yourself with these types of terms just in case it occurs.
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