Escrow basically means to place something important in the custody of an impartial third party. In real estate, an escrow account is utilized after an offer has been accepted and while the buyer and seller are working to meet the conditions of the contract. This is the state of being “in escrow.” The escrow officer could be an attorney, title company, specific escrow firm, or other qualified and impartial third party. The escrow officer orders a title search, requests payoff information for the existing mortgage and any other liens on the property, prepares all documents including the grant deed to transfer ownership, prepares the closing documents, and takes charge of all funds involved in the transaction, such as paying off the existing mortgage.
Of course, like all things confusing things, the term escrow also has a second meaning in the real estate world. It can also mean an account that your mortgage company requires you to keep a certain balance in to cover the cost of property taxes and insurance when they come due.
Thinking of buying or selling a home in Sussex County, give us a call at Cooper Realty Associates and put us to work for you – 302-644-2266.