Real estate transaction process (US Property Buying)

Escrow Procedure in Real Property Buying & Selling

In the United States, the escrow process is a critical step in real estate transactions, ensuring a secure and transparent transfer of property ownership. Below is an overview of the escrow procedure:

1. Opening Escrow: Once the buyer and seller agree on terms and sign a purchase agreement, an escrow account is opened with a neutral third party, known as the escrow agent. The buyer typically deposits earnest money into this account.

2. Title Search & Insurance: The escrow company conducts a title search to ensure the property is free from liens or claims. Title insurance is usually obtained to protect the buyer and lender from potential title defects.

3. Loan Processing & Appraisal: If the buyer is financing the purchase, the lender processes the mortgage application, and an appraisal is conducted to determine the property's value.

4. Inspections & Contingencies: The buyer arranges property inspections to assess the condition of the home. If any contingencies were included in the purchase agreement, they must be satisfied or waived before proceeding.

5. Final Walkthrough: Before closing, the buyer conducts a final walkthrough to ensure the property is in the agreed-upon condition.

6. Signing & Closing: Both parties sign necessary documents, including the deed, loan paperwork, and closing disclosures. The buyer submits the remaining funds, and the escrow agent ensures all payments, including closing costs, are properly distributed.

7. Title Transfer & Closing Escrow: Once all conditions are met, the escrow agent transfers the property title to the buyer, records the deed with the county, and releases funds to the seller. The transaction is officially closed.

This process helps protect both buyers and sellers, ensuring a smooth and legally sound property transfer.