The escrow process is typically initiated when the buyer and seller reach an agreement on the terms of the real estate transaction. Once the escrow is opened, the neutral third party, often an escrow officer or a title company, steps in to oversee the transaction. They receive and hold onto the funds, documents, and other assets until all agreed-upon conditions are met.
During the escrow period, the buyer may conduct inspections, obtain financing, or perform any other necessary due diligence. The seller, on the other hand, may be required to address any issues that arise during inspections or fulfill certain repair obligations. The escrow officer ensures that these conditions are met by coordinating with all parties involved, including lenders, insurance agents, and title companies.
Once all the conditions have been satisfied, the escrow officer facilitates the transfer of ownership by distributing the funds and transferring the title to the buyer. This final step is completed only when both the buyer and seller have successfully fulfilled their obligations. The escrow process provides a level of security and transparency for both parties involved, ensuring a smooth and fair real estate transaction.