The Role of Escrow in Real Estate Transactions
A transaction is a transfer of funds or goods between two or more parties that are in an agreement. In commercial businesses, this can be easy once you deliver a particular good or service. It might sound that it is the same thing when you are dealing with real estate. However, the simplicity that is applied to other transactions is not the same with the real estate market.
A real estate transaction bears complexities and conditions before the piece of land or property is handed to the new owner. There are steps that are taken in order to make sure that your money is protected. One of those strategies is escrow.
At Chris Price Realty, we care enough to make sure that you have the knowledge of such terms. In this article, we will try to go through the role played by escrow. Make sure that you pay attention and pick up the nuances that will help you understand the need for escrow in a real estate transaction.
Act as a Neutral Place
If money is a game, then having a referee is a good idea. It is important because things can go south at any time. People can decide to manipulate, lie or even purposely delete information about a particular real estate. Escrow acts as a stalling benefit. Before signing the final closing documents to buy or sell escrow gives you the luxury to cool down and see things as they are.
This pause is important and ensures the protection of both parties. In most cases, a third party can be the escrow. This particular person or company has a legal duty to act with substantial care to ensure that documents, records, information, and money are provided in a timely fashion. Such integrity makes sure that the conditions provided satisfy both parties.
You can decide to give a cold shoulder to escrows, but you need to understand that most of the time when a deal is done, it is done. Since this might be one of the most important transactions in your life, you want it to go smoothly. Going through escrow means having someone who will look out for the needs and wants of both parties.
Offers protection
Although the common label of real estate is it is an asset, we all know that it affects our personal lives also. If you are a buyer, you may be cautious of the seller’s intentions and take a slower approach. This is because the buyer knows that the real estate is more than a piece of property and land. It offers housing, a connection to the community, and shelter from the elements. Escrow allows this approach and gives the buyer time to ensure everything checks out.
A seller can also be in doubt of the capacity of the buyer to meet the terms of the contract agreement. The time during escrow allows the seller to be sure that the buyer has what it takes in regards to finances to purchase the property.
The escrow process helps both sides of the deal and ensures that deals are done without compromise. Reach out to Chris Price Realty if you have any questions about escrow!