When it comes to purchasing a home, there are many detail-oriented steps that need to be completed in order to close the transaction. Some of these steps include:
- Interviewing real estate agents to see what services they can provide you.
- Discussing your wants and needs with your selected agent, and most likely sign a Buyer Representation Agreement (BRA).
- Getting pre-approved (not pre-qualified!) by a trusted lender and discussing your budget & what you’re comfortable with paying.
- Scheduling showings on current listings.
- Deciding on the perfect home & placing an offer.
- Acceptance of offer & removal of contingencies.
- Escrow & closing.
Escrow plays an essential role in the closings of real estate transactions. So what exactly is escrow? Escrow is the deposit of funds, a deed, or other items to a neutral third party account for the purpose of completing a real estate purchase.
You need escrow because it facilitates the real estate transaction by managing the disbursements of funds and documents. It provides assurance that no funds or property will change hands until all instructions for the transaction have been completed.
The key players in any real estate transaction are the buyer, the seller, the real estate agents, the lenders, and the escrow officers. The real estate agent gathers all the paperwork and information necessary to close escrow and provides that information to the escrow officer.
The escrow officers job is to ensure that all instructions from both sides of the transaction have been met and completed before any transfer of property takes place. This ensures that the process is done legally and accurately.
Some of the steps required to complete escrow is a completion of a home inspection, purchasing a homeowners insurance policy, disbursements of funds, negotiating & completing repairs, and more.
It is the responsibility of the buyers & sellers to make sure that information is made available in a prompt matter, and that all information is as accurate as possible.
For more information on Escrow and the companies that provide this service, contact your local Berkshire Hathaway HomeServices Realtor® for more information!
BRA- Buyer Representation Agreement – A document that states that you are electing to work exclusively with the given agent of your choice. This protects both the buyer and seller in the sense that the buyer has documentation of the expected responsibilities and fiduciary duties of the agent and the agent is protected from buyer using another agent for the given transaction after obtaining resources from the primary agent.