So, your offer on your new home has been accepted and is now in escrow—congratulations! If you aren't already familiar with the home-buying process, you might be asking yourself, "What exactly IS escrow?" In this blog, we'll explain what it means for your offer to be in escrow and what you can expect during that process.   

What Is Escrow?

Escrow is a third-party service that is part of every real estate transaction. Once a buyer and seller arrive at a purchase agreement, they bring in a third party, the escrow agent. The escrow agent collects a deposit from the buyer that is a small percentage of the agreed-upon purchase price. In return, the seller takes the property off the market. Until the purchase process is completed, the property and the deposit are "in escrow."

Escrow timelines can vary, but most last 30 days. And while every sale is different, this timeline should give you a good idea of what to expect.

Week 1: Inspections and Disclosures

Inspections and disclosures are an important part of any home-buying venture. A general certified home inspection is the baseline, but the mortgage lender may also require additional, more specific inspections, like a pest inspection or a flood inspection. Inspections are typically ordered and paid for by the buyer. At the same time, the seller will provide any disclosures to the buyer. Disclosures describe any material defects or past issues with the property.

Week 2: Decisions

During this week, there are several items that need final decisions made. First up is loan approval. Even if you're already pre-approved for a loan, at this stage in the game, your lender will prepare a "good faith estimate" detailing the loan amount, monthly payments, interest rate, and closing costs. During this time, you'll also review the appraisal report and seller disclosures. With all of this information, all parties involved will be able to decide if any adjustments need to be made to the purchase price, if there will be any repair requests, and finally, if you still want to go through with the purchase of the home.     

Week 3: Contingency Releases

Week 3 is all about meeting deadlines. At this time, you'll be responsible for signing a release of contingencies. There are many different types of contingencies—for example, making a purchase contingent on certain repairs being made. These contingencies should contain a time frame or action to release them. If you haven't signed a release of contingencies by the agreed-upon deadline, the seller can cancel the contract.   

Week 4: Final Details

Ideally, during the last week of the escrow timeline, all repairs will be completed, and any contingencies satisfied. (Timelines can always be adjusted, so don't panic if there's still a lot to do during week 2 or 3.) When everything is ready to go, you'll conduct a final walk-through to make sure that repairs have been made, check for items that will convey with the purchase (for example, kitchen appliances), and ensure that no damage has been done to the home in the meantime. After that, you can expect to sign a lot of documents and pay any costs related to the sale other than the purchase price. Your money that was held in escrow will be released and applied to the purchase of the home. The grant deed will be recorded at the assessor's office, and then—finally, get the keys to your new home!    

Whether your home-buying experience goes smoothly from start to finish or experiences some road bumps along the way, you'll want an experienced and knowledgeable real estate agent by your side. Agents at The Masiello Group can't wait to help you every step of the way.

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more.

Our agents are eager and excited to meet your real estate needs!

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.