What is Escrow?
According to Marriam-Webster, Escrow is defined as “a deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition”. When it comes to the purchase of real estate, no matter what role you play—the buyer, seller, lender or borrower, you want to make sure that all the instructions in the transaction have been followed before the money exchanges hands. That is what the escrow holder does. They safeguard the funds and disburse them on only when all provisions of the escrow have been met.
These provisions are put into writing by those involved in the transaction and then provided to the third-party escrow officer. This officer will process the escrow according to the instructions. Once all the conditions have been met then the escrow will be “closed”. Although they tend to follow the same pattern, each escrow could be different as it deals with unique properties and transactions. Your loan officer and/or realtor can help guide you through this process and advise you of situations that may arise.
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