BUYING STEP #9: PUT MONEY IN ESCROW While purchasing a home, the buyer is expected to put money into escrow. This makes the contract binding and subsequently moves it through closure. Escrow is the period between the time a purchase offer is made on a property and the time when that property’s title is transferred to the new owner. The initial deposit amount collected as part of the escrow is also referred to as good faith earnest money. This is the payment that will follow the home purchase process. How much is to be deposited in the escrow will depend on the terms in the purchase offer. An escrow agent is a third party enjoying a neutral state between the buyer and seller. The escrow is assurance to both parties and is involved in the transaction so that the clauses of the offer will be met completely. In the real estate arena, the escrow process is essential in cases where the ownership title is to be changed. The escrow agent is the manager of the trust account that holds the funds that will cover the value of the transaction. The money collected from the buyer is held in escrow until the seller completes their obligations and transfers the title to the buyer. After this, the payment is remitted to the seller. The earnest money is used to cover some or all of the down payment, purchase price, and closing costs. BUYING STEP #10: NEGOTIATE WITH THE SELLER This is the toughest aspect of a home purchase for many buyers. Here, you will find the help of the real estate agent highly useful. Plan how to make a winning negotiation. This requires thorough market research and is achieved through successful negotiation strategies. Once you find your prospective house and intend to make an offer, review comparable sales in the area. Compare these comps with the target house. This helps validate the asking price.
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