When buying a home, your mortgage company will establish an escrow account from
which property tax and insurance are paid. Managing this account is an escrow agent, which is a person or entity that holds the legal documents and funds. In most cases, this person is an attorney although it could also be a representative of a title or escrow company.
The escrow money is held in a special trust until the condition of your contract has been fulfilled. Although the escrow is usually money, there are certain occasions when it could be other types of property to include deed of title, software source code, or art. Sometimes, a real estate agent in certain jurisdictions is also considered legal to act as an escrow agent in which, they accept deposits for the purchase of a home.
When you have the purchase agreement, this would include any offers and counter
offers that make up the contract, along with initial instructions to the agent. Then, the escrow agent would serve as a third party, ensuring all the conditions of the sale are in order according to the lender’s requirements. In addition, the escrow agent would handle the paperwork and any cash.
One of the most important things is to have a reputable escrow agent so you know the closing of the house goes without any problems and on time. If you do not know a good agent, your real estate agent should be able to recommend one. Just remember that a normal escrow takes between 30 and 60 days since lining up the homeowner’s insurance takes time.