In escrow but what does that mean?

Real Estate Agent with Sandpoint Realty AB36782

So, you've got an accepted offer on a property, and now you're in the "escrow period." What the heck does that mean? Well, let me break it down for you.

In Escrow
First things first, your agent will open an escrow account with a third-party Title and Escrow company. Escrow will keep all the important documents, funds, and instructions safe and sound until the deal is done.

What happens to the Earnest Money
The buyer typically provides an earnest money deposit, which is a sum of money demonstrating their commitment to purchasing the property. The funds are held in escrow and will be applied towards the purchase price at closing.

Title Search
The title officer will dig deep into the property's background to make sure there are no hidden issues, liens, or ownership disputes. They also pull up documents affecting the property like Covenants, Conditions and Restrictions (CCR's) and easements   The title company then provides both the buyers and sellers with a title insurance commitment outlining the information.

During the escrow period, the buyer usually conducts thorough property inspections. These inspections may include a general home inspection, pest inspection, roof inspection, as well as assessments of the well and septic systems, among others. Meanwhile, the seller provides necessary disclosures, sharing information about the property's condition and any known defects.

Financing and Appraisal:
If the buyer is obtaining a mortgage, they will work with their lender to finalize the loan application and provide necessary documentation. The lender will order an appraisal to determine the fair market value of the property, ensuring it aligns with the loan amount.

Contingency Periods:
Depending on the terms of the purchase agreement, there may be contingency periods, such as a financing contingency or inspection contingency. These periods allow the buyer to cancel the contract or negotiate repairs or concessions if certain conditions are not met.

Closing Prep:
Once all the contingencies are cleared, and you're ready to move forward, it's time to prepare for the closing. The escrow officer will work their magic, getting all the necessary paperwork ready, like the settlement statement, loan docs, and deeds.


Finally, it's closing time! At the closing, both parties sign the required documents. Amazingly, experienced escrow officers are very good at reading upside down and explaining what you are signing.

Recording and closing
But wait, we're not done yet. The escrow officer will make sure all the i's are dotted and t's are crossed. They ensure that funds are transferred, liens are paid, all the instructions have been carried out, and then they record the deed and associated documents with the county. As soon as the deed is recorded, you are the proud owner of a new property, and it's time to celebrate.

It's a bit of a whirlwind, but don't worry. Your agent, lender, and escrow officer work together to get this all done as smoothly as possible.

Happy escrowing!

Posted by

Rain Silverhawk

Search Homes
Come See Listings or more about Rain Silverhawk at
Rain Silverhawk Realtor
Sandpoint Realty LLC
1205 Hwy 2 STE 203 B |  Sandpoint, ID. 83864
Phone (208)  610-0011  


Comments (7)

Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Jul 16, 2023 03:06 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Rain. Great review of the many aspects of a property in escrow Thanks! Enjoy your day.

Jul 16, 2023 04:55 AM
Kat Palmiotti
406-270-3667,, Broker/REALTOR® - Kalispell, MT
Helping your Montana dreams take root

Great overview of escrow....  I laughed at this because it's so true "experienced escrow officers are very good at reading upside down"

Jul 16, 2023 04:56 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Rain - sometimes real estate "lingo" can be used in an almost willy-nilly way.  What may be common to practitioners or those familiar with the process can be unusual for others "new" to the game.  

Jul 16, 2023 04:57 AM
Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Excellent post.Thank you for sharing. Have a wonderful day and a blessed week

Jul 16, 2023 07:03 AM
John Juarez
The Medford Real Estate Team - Fremont, CA

Great explanation of how escrow works, Raine. At least in Idaho. And your descriptions are reflective of how escrow is handled in Northern California, also.

Real estate customs, laws and traditions can differ from state to state. And of course not all escrows include the pieces as you described them. Such as an escrow in which the buyer is waiving all contingencies.

Aug 28, 2023 02:17 PM