If you are looking to buy a home in Georgia, chances are you have probably heard of escrow. But what exactly is escrow, and how does it affect you when buying a home?
In real estate, escrow can have several meanings, so the definition of the term can be confusing—but for the most part, being in escrow means that both your house and your money are in a temporary limbo as a contract is being finalized.
Escrow is defined as an impartial third party holding on to something of value during a transaction. When you decide on a home that you would like to buy, you write an earnest money check. This check does not go to the seller of the home, but is held temporarily by an impartial third party until both you and the seller reach a negotiation on the price of the home and close the deal. During this time, neither you nor the seller can touch the earnest money check because it is in escrow.
The impartial third party is important because that way the seller cannot hold the check hostage as a negotiation tactic, but the seller also won’t hand over the deed until the home is paid for. Through escrow, everyone involved is ensured that he or she gets what is due at the same time.
Lenders and Closing Involving Escrow
Throughout the home buying process, you might hear the term “escrow” pop up a lot for various payments, such as homeowner’s insurance and property taxes. Your lender will collect these payments from you and hold them in escrow so that they are available and ready to go when the bills need payment.
You might also hear the term “closing of escrow” when it is time to close the deal on your future home. Your escrow officer or real estate attorney will handle the exchange of funds. The attorney will make sure that all of the documents are handled and signed, all necessary conditions are met, and that the money is properly disbursed.
How One Closing Source Can Help
At One Closing Source, we handle all of the escrow processes so that you don’t have to. Our experienced staff can walk you through the home buying and closing process every step of the way. If you have any questions about escrow or if you need assistance with a real estate transaction, give us a call.