Escrow

Because the sale of a home usually involves a great deal of paperwork and the transfer of large sums of money, everyone involved needs to be sure that the parties have performed their duties as outlined in the purchase contract before property and money change hands. A neutral third party, called an escrow agent, escrow company, or escrow holder, is used to verify that all instructions and contingencies of the contract have been fulfilled before funds are released and the property changes hands. This valuable service assures that no one is deceived in the transaction.

Once the purchase offer (and any counter offers) has been accepted and the buyer's earnest money deposited, escrow is said to be "open." And when all documents are signed by the buyer(s) and seller(s), the funds necessary to purchase the property have been received, and the Deed to the home is recorded in the new owner's name at the County Recorder's Office, escrow will be "closed." When escrow is closed, the transaction is complete.