What is Escrow and Why is it Needed?

September 22, 2018

What is Escrow and Why is it Needed?

For a lot of first time homebuyers, the whole process of transferring ownership can feel like a total blur. There are so many different documents to sign and questions being ask that it can often be extremely overwhelming. As a full-time Real Estate Agent in Queen Creek, one of the most common questions I get from new buyers is what is escrow and why is it needed.

First things first, let’s talk about what escrow is exactly. In simplistic terms, escrow is the deposit of money and documents by 2+ parties with a neutral third party. The money/docs are then held by the third party until certain conditions of the contract are met.

Now brings me to the second part of that question…Why do we need to do this? Again, let’s take a step back for a second. Back in the early days of our country, property was transferred directly from the seller to the buyer. Essentially, the seller handed over the deed to the buyer when the buyer handed over the money. However, when people started exchanging property with strangers, buyers began to seek out lawyers to help ensure the seller actually owned the property. Now, escrow officers are not attorneys, but they can be helpful in a similar way.

Having a neutral, third-party involved in any big transaction is always beneficial. Escrow is a form of protection for the consumer, as it guarantees that all contract requirements are executed correctly, all funds are accounted for accurately, and a safe delivery of all funds and documents are released to the appropriate recipients.

If you are looking to buy or sell your home and have a few questions about the process, please feel free to give us a call! We’d love to help!

 

We are full-time, experienced Realtors working in Queen Creek and the surrounding areas.  With decades of East Valley real estate experience under our belts,  we are here to answer any questions you may have.  Please do not hesitate to reach out to Karen Berg at 602.919.2375 or April Anderson at 480.272.1977.

We’re looking forward to hearing from you soon!

Karen Berg and April Anderson

United Brokers Group
21321 E Ocotillo Rd F113
Queen Creek, AZ 85142

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602.919.2375