What is Escrow in Real Estate?

In its essence, an escrow is a mechanism that is has been put into place in real estate to ensure safe dealings for both parties. If you are looking to buy property, you will want to have a good understanding of this process and how it works to protect both you and the seller. In this article, we will run through what escrow is, how it works, and who to call to help you with it.

Neutrality for Safety:

An escrow is an account that is held by a trusted and neutral 3rd party when going through the process of closing a real estate deal. What is held in this account? Earnest money, of course.

What is Earnest Money?

Earnest money is a deposit that is put down to represent the buyers’ serious intention of buying the home or property. It is basically good faith money that is a small percentage of the price of the home. This makes obvious sense in terms of safety as the seller is assured of intent and unable to take a better offer at the last minute. This amount is usually about 3 – 4 % of the price of the home which still adds up to thousands in most cases.

Earnest money is held while the process of closing the property is conducted and certain criteria are fulfilled. This is where it gets a little more complicated for buyers and really becomes important to consult with an expert such as a real estate attorney.

In fact, you will typically find an escrow account through such an expert. What comes next is equally or more nuanced and will require their skills as well as we will touch upon below.

How Long is Escrow Used:

An escrow is held until the deal is closed. In Florida there are 8 more steps to closing a real estate deal that must be done without error or delays and worse may occur. Once the earnest money has been deposited the buyer must apply for a home loan. Simple enough so far, then the property is appraised and inspected.

Once this is complete a title examination must be conducted. This is crucially important to be done correctly as title errors can result in big problems for ownership. Once this has been performed meticulously, a title policy is issued and a survey is conducted.

Should the buyer fail to complete these steps and back out, the seller is awarded the escrow. As you can see, this is a lengthy process that requires expertise. It is always advisable to consult an expert like a real estate attorney from Rock Solid Law.

Why Choose Rock Solid Law?

At Rock Solid Law, we are specialized in the unique needs of the Jacksonville, Florida area. We have been providing our expert guidance to our highly valued clients for over 30 years, and are experts in the areas of business law, real estate, real estate planning, and probate and trust administration.

The world of real estate can be a gamble that pays for life if you manage your cards right. The highly experienced and dedicated team of professional real estate attorneys at Rock Solid Law will help you make the best possible decisions with your biggest investment with expertise that you can count on. Get in touch with us and take advantage of our years of experience and specialization.