Buying a home is a huge financial transaction, and securing funding for the purchase can be a long and arduous process. As such, you’ll need a strategy to protect this large sum of money. Fortunately, there are various steps laid out to protect all parties involved in the homebuying process - one of which is escrow.
Read on to learn how escrow minimizes risks when buying a home in Logan Square:
What is an escrow?
Typically, escrow in real estate is a legal concept describing the financial instrument whereby a third party holds money and property documents on the seller’s and buyer’s behalf. It may entail escrow fees for the third party who holds the funds and documents until receiving appropriate instructions or the fulfillment of the predetermined contractual obligations.
How does escrow work?
Escrow opens when you sign the sale agreement with the seller. You, the buyer, deposit earnest money with the escrow holder, who’ll apply it to the purchase price once the deal is finalized. When a home is in escrow, it’s your responsibility to finalize your mortgage agreement and ensure that home inspections, disclosures, and title searches are completed or resolved on time. Once everything has been verified, escrow will close, the purchase money will be disbursed to the seller, and the title will be recorded in your name.
How does escrow minimize risk in the homebuying process?
Placing funds and instructions in the third party’s hands while under contract offers security and ensures that the contract requirements will be agreed upon and met before the money is paid. Moreover, it assures that your investment won’t be jeopardized should the deal go south. Your money is protected and will be returned to you if it was the seller’s fault that the deal fell through.
Minimize Risks When Buying a Home in Logan Square!
Escrow exists to mitigate risk. It ensures everyone is satisfied with the final outcome of the sale transaction, and the money is also protected along the way. For more information about how escrow minimizes risks when buying a home in Logan Square, feel free to reach out to our real estate professionals!