How Does Escrow Work When Buying or Selling a House?
If escrow real-estate transactions still confuse you a bit, in this article, we will be looking at the escrow process of a home sale or resale. Below, we go over the steps of this specific escrow process in California so that you know exactly what you should be expecting.
For those of you who are new to what escrow in real estate is, we suggest you check out our other resources that define the escrow process for you, first! When you are ready, head back over here to get the full escrow process for a home resale explained.
Home Resale Escrow Process, Step-by-Step
The steps in a residential home resale escrow transaction are actually very simple. Below, you will find the steps of the escrow process from start to finish.
How to successfully close a home resale escrow transaction
- First, the two parties entering the escrow process will agree in writing on the escrow terms, including but not limited to the length of the escrow, financing terms, deposit amount and which parties pay for what fees.
- The buyer will deposit their earnest money.
- Then, the Buyer and Seller complete all escrow paperwork, including the Seller’s execution of the grant deed to transfer ownership. The Grant Deed gets recorded simultaneously with other documents on the day escrow is scheduled to close.
- At this point, the Buyer executes any applicable loan documents and deposits the balance of the down payment plus closing costs.
- If the above conditions are fully met within the stated escrow timeline, the transaction closes and the change in property ownership occurs.
How Much Does Escrow Cost for a Home Resale?
There is always the question of how much an escrow service actually costs. This price will normally depend on the agreed-upon terms between the two parties as well as the escrow regulations in each state. In general, however, a real-estate escrow process costs between 1% and 2% of the real-estate transaction price.
In addition, many escrow companies will add in hidden fees on top of the percentage of the transaction price. To avoid paying extra fees and getting surprised with more expenses, choose an escrow service that is fully transparent with prices.
The escrow process can be taxing and can get even more expensive if things go wrong during a transaction. Not only will this burn a hole through your wallet during the home buying process, but it can also be emotionally draining for buyers, sellers, and agents that are ready to close on a home.
How Long Does Escrow Take for a Home Resale?
The escrow process can take anywhere from a week to a couple of months to close, depending on what parties have agreed upon, how complex the process is, and most importantly, who your escrow service provider is. In the hands of the right escrow agent, the process shouldn’t take more than 30 days.
Should be a 30 Day Escrow Process
Escrow processes that take longer than 30 days to finalize leave Buyers, Sellers, and Real Estate Agents extremely frustrated. Being caught in limbo while your money sits in an account and your time is wasted is a daunting experience during a home resale.
Get The Best Escrow Service
And there you have it! That was the simple overview of how escrow works in a home resale. Make sure you choose an escrow service with a track record of closing the escrow process smoothly and safely so that you don’t suffer the emotional cost and wasted time of a bad escrow. If you want to learn the escrow process for a new home sale or how escrow works when refinancing, check out our other resources on our website.
If you need help setting up the escrow process for your home resale, New Venture Escrow offers the easiest and fastest escrow in California. Contact our escrow experts and we will guide you through the escrow process in your next home resale.