The Escrow process is simply a way of putting money or a deed, in the possession of a neutral third party until specific conditions are met.
Escrow agents or companies frequently manage and oversee transactions in real estate to ensure a smooth process. When a deal completes, a loan servicing organization may set up an escrow account in the interest of the borrower. They make sure as of part of the transaction all the property documents and property taxes they are up today at the time of closing.
Significance of Escrow
Escrow is necessary for any real estate purchase because it protects the parties involved in the transaction. Let’s assume some cash is put down that went straight to the property seller. But after that, a sales term with the seller couldn’t be reached. The buyer doesn’t need the seller holding any money hostage. In the same way, the seller has no desire to sign over the deed to the home until it’s paid for. The escrow process guarantees everybody gets what they need.
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