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A lot of my clients seem to ask me about escrow and escrow accounts. It’s a bit of a confusing topic, so I would like to clear a few things up today.
An escrow account is basically a third-party account set up during a real estate transaction so that the transfer of money to seller from the buyer can be handled safely by a third party. Basically, it’s an account for buyers to put money into in order to pay for a seller’s home.
Another form of an escrow account is when you have a mortgage that you’re paying to the bank. You’re giving them money and they’re depositing it in there, but you’re also giving them 1/12th of your property taxes and they will be paid out twice per year.
Another escrow account is one that might be opened up by two real estate attorneys in order to take care of something that was necessary with the home after the purchase and the closing has taken place. A common example might be an open certificate of occupancy. Maybe a homeowner added a shed, and the buyer wants some insurance to know that are funds available if something goes wrong while he/she owns the home.
These are a few different examples of what escrow accounts can do and be used for. I know it’s all a bit complicated, so please don’t hesitate to ask me any questions.
An escrow account is basically a third-party account set up during a real estate transaction so that the transfer of money to seller from the buyer can be handled safely by a third party. Basically, it’s an account for buyers to put money into in order to pay for a seller’s home.
Another form of an escrow account is when you have a mortgage that you’re paying to the bank. You’re giving them money and they’re depositing it in there, but you’re also giving them 1/12th of your property taxes and they will be paid out twice per year.
Another escrow account is one that might be opened up by two real estate attorneys in order to take care of something that was necessary with the home after the purchase and the closing has taken place. A common example might be an open certificate of occupancy. Maybe a homeowner added a shed, and the buyer wants some insurance to know that are funds available if something goes wrong while he/she owns the home.
These are a few different examples of what escrow accounts can do and be used for. I know it’s all a bit complicated, so please don’t hesitate to ask me any questions.
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