Escrow is one of those terms that can confuse and overwhelm people going through a real estate transaction. However, it does not need to be so confusing. By understanding the terminology associated with escrow, as well as the reason why it is so important, you will feel more prepared to go through the process.
Going through escrow efficiently requires that you have a good overview of all aspects the process. Take the following steps when starting to address escrow.
Understand why it’s important
Many buyers and sellers dismiss escrow as an irritating bureaucratic aspect of going through a real estate transaction. However, to fully understand it means appreciating the importance of the process. Escrow plays a key part in keeping your funds secure in the event of a real estate transaction falling through. It also protects the seller because it ensures that the buyer has the funds to make the purchase. It also protects the buyer from fraudulent sellers.
Take responsibility for the process
As the buyer or the seller, you should remember that you have an active role to play in the escrow process. Make sure that you read over all documents relating to escrow. Ask your real estate agent any questions you have, and similarly make yourself available so that you can respond to queries that other parties have. You will also need to be organized, and you should hold on to all escrow documents for tax purposes.
Going through escrow is a necessary part of any real estate transaction. You must understand all the steps involved in a real estate transaction, so you can successfully close.