through and toward closure. A lot of people, both buyers and sellers, are confused about what “escrow” is. Essentially, it refers to a time period, not a place. Escrow is the period between 1) the time an o ff er of purchase is made on a property; and 2) the time when that property’s title is o ffi cially transferred from seller to buyer — to the new owner. Th e escrow process is essential in cases in which the ownership title will be changed. Th e money put into escrow, or the initial deposit amount collected as part of escrow, is considered as “good faith” money or “earnest” money. Th is money is the payment amount that will follow the home purchase process. How much money are you, the buyer, supposed to put into escrow? Th is totally depends on the terms as stipulated in the o ff er of purchase. Still confused? Th e good news is that an escrow agent who specializes in this period and process should be involved. Th e agent serves as a third party who enjoys a neutral state between seller and buyer, and helps provide assurance to both parties. Th e agent is also heavily involved in the actual transaction to ensure the clauses of the o ff er will be met completely, accurately, and satisfactorily. Further, the escrow agent serves as the manager of the trust account that holds the funds that will cover the value of the transaction. You might be wondering how long the money that you will deposit remains “in escrow.” Th e money collected from the buyer is held in escrow until the seller completes his or her obligations, and transfers the title over to the buyer. A ft er this transfer is authorized, ver ifi ed, and completed, the payment is then remitted to the seller. Th e “good faith” or “earnest” money is used to cover some of the down payment, the purchase price, and the closing 84
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