When buying a home, you may find yourself having to go through escrow. And while the concept of escrow may be a confusing topic to get a firm grasp on, it’s imperative to understand and learn in order to have a smoother homebuying experience. As such, we’ve broken down everything you need to know about real estate escrow in Tampa. Keep reading to learn!
What is Escrow?
Escrow is when a neutral third party is granted legal power to hold assets, documents, or money until special conditions are met. It serves to lower the risk for all parties involved in the transaction. In real estate, you’ll have to put in a good faith or earnest money deposit in escrow to demonstrate that you intend to follow through with the purchase, while the seller hands over the deed to the house.
The seller will typically keep the earnest money if the transaction fails because you changed your mind. But if there are issues from the seller’s end, like problems revealed during an inspection, you’ll get your deposit refunded.
How Does Real Estate Escrow Work?
In real estate escrow, you place the down payment on the house in the established escrow account, which a neutral third party manages. That assures the seller that you can make payments, and you can then go ahead with the home inspection and appraisal. Once all contingencies or conditions are met to your satisfaction, the seller can get the funds you placed in escrow while you get the deed to the house.
How is Escrow Handled at Closing?
After closing the homebuying deal, the escrow officer releases the funds to the seller. But, in some cases, the funds may be retained in the escrow even after the deal is closed. That’s what’s known as escrow holdback and may happen if you allow the seller more time to stay in their home as they prepare to move out. It could also happen if you find an issue with the property just before the closing and want the seller to fix it or renegotiate the deal.
Learn More About Real Estate Escrow in Tampa
Real estate is full of unfamiliar terms that may easily throw you off. It’s enough to confuse even the most diligent non-real estate pro, which is why it’s paramount to always work with a good agent. Our real estate agents in Tampa are here to help ensure that the entire homebuying process runs smoothly and seamlessly. Call us now!