If you’re new to the real estate market, you may have heard the term “escrow” being used. Escrow actually has many different meanings in the real estate process. Let’s discuss the two most common forms of escrow.
The first type of escrow occurs when a property goes under contract. This is known as “opening escrow.” Opening escrow is the process from when the contract is made until the actual closing time. During the escrow period, the buyer gets their financing in order and inspections on the property are done.
Another common use of escrow is an escrow payment with a bank. Once you are established with a bank, we have closed on your home, and you have your monthly payment, you can have your payment “escrowed.” This means that each month you would make your principal and interest payment for your loan, and you can also have a portion go to real estate taxes and insurance. That is known as an “escrow payment.”
There are other meanings to the term “escrow,” but those are the most frequently used in real estate. Your trusted agent and bank lender can guide you through a smooth process so that you can focus on what’s most important to you. If you’re searching for the right agent, learn more about our brokers here to see if you find a good fit.