How an escrow agency helps buyers and sellers | Just Ask Jan

Published 10:40 am Friday, April 24, 2015

Dear Jan:

I have heard friends say, “Our home is in escrow.” I know it means they have an offer on their home, but what exactly is escrow?  — RF

Dear RF: Good question. Escrow is the neutral third party in a transaction. They do not represent the buyer or seller. Their job is to keep custody of a deed or other document until the specified condition has been fulfilled. So in the case of home sales, the escrow company holds the deed to the property until the funds are in hand and the documents are recorded at the county.

Most escrow companies have officers who are Limited Practice Officers. They are allowed to prepare the forms needed for closing, but they are not to practice law. In Washington state, the buyer gets to choose the escrow company; however, that does not then mean that escrow is partial to them. Again, they are to remain neutral.

I will give you a quick run down here of the steps we take in a transaction:

The buyer finds the property they want to buy, then they ask a real estate broker to write an offer. After the contract is mutually accepted by the buyer and seller, the buyer’s agent opens escrow by sending the escrow company named in the contract a copy of the contract and the earnest money. If there is a lender involved, the lender sends their documents to the escrow company for signatures on the closing papers.

Once the lender reviews the documents, they release the documents for the title company to record them and return them to the escrow company.

All of this, of course, takes more than a few days, so closing escrow usually takes 30 to 45 days. That, of course, is when we all do the happy dance! — Jan

— Jan Zufelt is an agent with John L. Scott Real Estate in Kingston.