Escrow: Now What?

Congratulations, you are on your way to owning your very own home! Follow these suggestions (and the advice of your Realtor®) so that escrow and settlement go as smoothly as possible.

You will be asked for a down payment on the home you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but remember: the more you put down toward the total price of your home, the less time it will take you to pay it off — and the lower your monthly mortgage payments will be.

During this period, you will need an escrow or settlement company to act as an independent third party. This company ensures funds are handled properly and coordinates much of the activity that takes place during escrow. Your deposit may also be held by an attorney or in the broker’s trust account. Make sure sufficient funds are available to cover the deposit.

The deposit check will be cashed and applied to the purchase price if the sale closes. If the transaction does not go through, you may be entitled to a refund (less standard cancellation fees). In some cases, the seller may retain the deposit as liquidated damages. Before signing a purchase contract, it’s wise to consult legal counsel about whether a liquidated damages clause is in your best interest.

What to do during escrow

1. Complete inspections early. Unsatisfactory inspection results may lead you to cancel the contract.
2. Secure financing. If funding cannot be secured within the agreed timeframe and no extension is granted, you must decide whether to remove the contingency or cancel the contract.
3. Review the title report. Ensure the seller can provide clear, marketable title and that all local and state transfer requirements are met.
4. Obtain homeowner’s insurance. This is typically required before closing and may take time if special coverage is needed.
5. Schedule utilities. Arrange for services to begin on your closing date.
6. Complete the final walk-through. Confirm the property condition matches the contract, including fixtures that should remain.

You’ve made it! Once the sale has closed, you’re the proud owner of a new home. Congratulations!

Want help staying on track during escrow?

We’re happy to review your timeline, answer questions, and help you avoid last-minute surprises.