What to Expect During Escrow

Once a seller accepts an offer, the transaction enters a phase called escrow. This is the period where the buyer, seller, lender, agents, and escrow company work together to complete all requirements before ownership officially transfers.

For many buyers and sellers, escrow can feel overwhelming because there are multiple deadlines, inspections, documents, and financial steps involved. Understanding the process ahead of time helps reduce stress and avoid surprises.

What Is Escrow?

Escrow is a neutral process where a third party holds:

• Funds

• Documents

• Instructions related to the transaction

The escrow company helps ensure:

• Contract terms are completed

• Money is handled securely

• Legal documents are processed properly

• Ownership transfers correctly

Escrow protects both the buyer and seller during the transaction.

Opening Escrow

Escrow usually begins shortly after the purchase agreement is signed.

At this stage:

• The buyer submits the earnest money deposit

• The escrow account is opened

• Initial documents are sent to all parties

• Key deadlines are established

The earnest money deposit shows the buyer is serious about purchasing the property.

Home Inspections and Investigations

One of the first major steps during escrow is the inspection period.

Common inspections include:

• General home inspection

• Roof inspection

• Pest inspection

• Sewer inspection

• Foundation inspection

Buyers may also review:

• Seller disclosures

• HOA documents

• Permit history

• Property reports

These investigations help buyers fully understand the property before closing.

Negotiations May Continue

Even after the offer is accepted, negotiations sometimes continue during escrow.

Buyers may request:

• Repairs

• Credits

• Price adjustments

Sellers can:

• Agree

• Counteroffer

• Decline requests

The outcome often depends on:

• Market conditions

• Severity of issues

• Strength of the offer

• Buyer and seller motivation

Appraisal Process

If the buyer is using financing, the lender will typically order an appraisal.

The appraiser evaluates:

• Property condition

• Comparable sales

• Market value

The lender wants to confirm the property is worth the agreed purchase price.

If the appraisal comes in low:

• Buyers may renegotiate

• Sellers may reduce the price

• Buyers may pay the difference

• Deals can sometimes fall through

Loan Approval

During escrow, the buyer’s lender finalizes the mortgage approval process.

The lender reviews:

• Income

• Employment

• Credit

• Assets

• Debt

• Property information

Buyers should avoid:

• Large purchases

• New credit accounts

• Major financial changes

Unexpected financial changes can delay or jeopardize loan approval.

Title Search and Insurance

The title company researches the property’s ownership history to confirm:

• Legal ownership

• Outstanding liens

• Easements

• Claims against the property

Title insurance helps protect buyers and lenders against future ownership disputes or title issues.

Signing Final Documents

As escrow nears completion:

• Buyers sign loan documents

• Sellers sign transfer documents

• Final settlement statements are reviewed

• Funds are prepared for transfer

This is often called the “signing” phase of escrow.

Final Walk-Through

Before closing, buyers usually complete a final walk-through of the property.

The purpose is to confirm:

• Agreed repairs were completed

• The property condition is acceptable

• No major changes occurred before closing

This is typically the buyer’s last opportunity to inspect the home before ownership transfers.

Closing Day

Once all conditions are completed:

• Funds are transferred

• Documents are recorded with the county

• Ownership officially changes hands

• The buyer receives the keys

This step is often called “closing escrow.”

Common Reasons Escrow Gets Delayed

Escrow delays can happen for several reasons, including:

• Financing issues

• Low appraisals

• Title problems

• Repair negotiations

• Missing documents

• Buyer or seller delays

Strong communication between all parties helps keep the transaction moving smoothly.

The Bottom Line

Escrow is the final stage before a home sale officially closes.

During escrow, buyers and sellers work through:

• Inspections

• Financing

• Appraisals

• Title review

• Final paperwork