What exactly is home escrow? Home escrow is a process that utilizes a third party to fairly and equitably transfer real estate property from one person to another. The purpose of the escrow company is to make sure that all steps in the real estate transaction process are completed on time and correctly. The use of a third party in the home closing process really simplifies the process and works as a safe way to transfer funds.
With home escrow, the third party that acts as the escrow agent is neutral, which means that they do not favor the buyer, nor the seller. Funds for the property are transferred to the escrow company where they are held while the home is in closing. Through the steps, there is documentation that must be completed, and the home escrow company will collect the documentation to ensure that everything is completed. This way, the transaction can occur correctly and on time, to the benefit of both the buyer and the seller.