Escrow is a word we relate to the buying and selling of a property, but what it means can seem unclear. Escrow is your house and money being in a kind of limbo while you and the other interested party work out the final details of the property transaction.
Specifically, escrow is an arrangement where you use a third party (somebody who is neither the buyer nor seller) to hold something of value. That third party helps to make the transaction safer by ensuring that both the buyer and seller meet their obligations.
When you make an offer on a commercial or residential property, for example, you will make a deposit that is placed in escrow. This means that money isn’t going directly to the seller at this stage, but instead is being held by an impartial third party until you negotiate a final contract and close on the deal. You can’t touch the money and neither can the other party. It’s in escrow.
As for the closing of escrow on your new property, a real estate law firm in Austin, TX, will oversee the final paperwork and handle the exchange of funds and recording of deeds. This will ensure that all the money is disbursed correctly, that the documents are signed and recorded, and that all necessary conditions are met before closing the escrow.
Escrow helps you to minimize the risk of buying and selling, mainly because the parties you are dealing with are likely strangers to you. Trusting the person on the other side of the deal with your property and money can be scary, which is why escrow is so important.