Is Escrow the Same as Closing?
June 05, 2023Escrow agents do a lot to make sure a real estate transaction runs smoothly. Thanks to their expertise and attention to detail, they can also help future owners feel reassured, ensuring that everything's in order and keeping all parties in the loop about any detail that needs to be resolved.
Escrow and closing are intrinsic parts of a real estate transaction, with escrow agents managing the most grueling steps. The end result is a clear road from the initial offer to the property transfer. Keep reading to get a better understanding of their job, and learn more about the importance of having top-notch escrow services during your purchase process.
Escrow in Florida's Real EstateEscrow refers to a third-party service that oversees multiple steps in a real estate transaction.
Escrow accounts are used to withhold a certain amount of money that the buyer deposits before a real estate closing. The amount in an escrow account serves to fund the transaction, including related payments like property taxes and homeowner's insurance. It usually covers a small percentage of the sale price.
Both parties must agree to open the escrow account, and the seller takes the property off the market following the deposit to show their reception of the buyer's offer.
If you're familiar with Florida's real estate, you know that escrow agents are an essential part of this process. Basically, the funds in the escrow account are entrusted to an escrow agent who takes care of managing all the relevant payments before the closing.
Real estate agents are expected to act as neutral parties, adhering to the right practices and leading the transaction to a satisfying conclusion. This assistance ultimately benefits both buyers and sellers, as the escrow agent can vouch for the buyer's good faith and the seller's honesty while presenting the property.
So, Is Escrow the Same as Closing?No, they're not exactly the same thing, but their correlation during a real estate transaction explains the confusion you may face while setting both concepts apart.
Opening an escrow account is just the starting point, and that's why the seller and the buyer are said to be in escrow in the time leading up to the final deposit. The closing is the last stage of a process that usually takes between 30 and 60 days to complete. Many factors affect its duration, from the number of property inspections to hidden claims on the title or legal gaps on any of the documents presented by the seller.
As explained in an article by Investopedia, potential buyers must get the lender's approval for a mortgage before signing the purchase agreement with the seller. This is followed by a long verification process involving the property documents and the property itself.
Both buyers and sellers are free to hire a real estate agent, so there's a third-party agent helping communication between both ends. Real estate agents can book property inspections and work through public records much more effectively.
Title searches are highly encouraged in the real estate market, and this is where the distinction between escrow agents and closing agents comes into play. You can't move on to the closing if the issues found during the property/title inspection haven't been fixed before the final walk-through. A closing agent checks that everything is in place, from the insurance policies to the final transfer.
At this point, the funds in the escrow account are released, and the closing agent oversees as both parties sign the contract before putting the closing on record.
A title and escrow company can save you a lot of time so that you don't have to secure the services of an escrow agent and a closing agent separately. The company's support can also clear out concerns regarding liens, unpaid taxes, ownership right, etc. and you can get the most fitting insurance policy.
Getting the Best Assistance Will Do Wonders For Your Peace of MindThe bottom line is: any of the steps described above can lead to disputes. For example, pests, code violations, and structural damage not only pose a potential safety hazard, they affect the property's market value and, more specifically, the sale price. These issues can't be left unattended if they're part of the conditions set by the buyer during the agreement.
An escrow service can encourage buyers and sellers to reach a middle ground after a disagreement. More importantly, the escrow agent will hold the funds until all the requirements are met, monitoring the new payments while the option to buy is still on the table.
Key Title & Escrow specializes in a wide list of services, including all the tasks expected from escrow and closing. We can help you take the right steps if the title search reveals problems, join you during property inspections, and check that all the paperwork is accurate before overseeing the closing.
A real estate transaction can be daunting even for a seasoned professional, so Key Title & Escrow wants to bring you the reassurance of a thorough service. Our team has facilitated the purchase of countless real estate properties in Florida. On top of up-to-date knowledge of the real estate market, we offer the most advanced technology to help you along the way.
Key Title & Escrow is equipped to handle all parts of your transaction, including the creation of an escrow account and the management of all the requirements you need to have fulfilled before closing date.
When you work with Key Title & Escrow, you secure the support of the best real estate professionals in South Florida. Our specialists are here to help you with all your escrow and closing needs so you don't feel overwhelmed while getting everything ready. Let us help you ensure a successful closing and the best experience! Just call (305) 235-4571 or toll-free at (800) 547-0006 and our specialists will gladly answer all your questions. You can also fill out the contact form on this page if you want more information before making a real estate offer. We can help you through every step of the way!