How Escrow Works
In my 23 years as a Realtor, Broker, and Investor in Tucson, I have often had to explain to clients and customers how escrow works. It’s not uncommon actually since most people do not have a working knowledge of the Title and Escrow process. Knowing how escrow works however is helpful for you when you are going through the process of selling your Tucson home.
This article isn’t a comprehensive and all exhaustive study of escrow. For that, I always recommend the people that I use at Title Security Agency. The are a local, and trusted company with a good reputation. This article will help answer some of the most common questions!
What Escrow Means
“Escrow” is the process where the Buyer and Seller deposit written instructions, documents, and funds with a neutral third party until certain conditions are fulfilled. In this case, a Buyer and Seller agree to the contract for the purchase of the home. The Buyer then takes earnest money and the contract to the Title and Escrow company. From there, the title company will then begin searching the title for any errors or problems with the title.
Where Does The Escrow Money Go
In Arizona, Escrow companies like Title Security are insured by the FDIC. It is held by a neutral party until all elements of the contract are completed. Typically, the earnest money is held by the Title company until closing, and then applied towards the buyer’s closing costs or prepaids.
Depending on the contract, the earnest money can be refunded, so be certain to use a state approved contract that is explicit about where the earnest money will go. There have been too many instances where the earnest money gets mixed up, or lost altogether. If you are going to take your home off the market, then ensure that you have a proper amount of earnest money!
Can Escrow Close Early?
In every single case I can think of, escrow can close early if both parties agree to it in writing. Generally speaking escrow can close as soon as their title search is complete, and their paperwork is ready for signing. What generally makes the escrow period 30 days or more is when the Buyer is using some form of financing.
When using a cash home buyer in Tucson like KarlBuysHouses, I can often close in as little as 7 days if necessary. Cash home buyers like me can close quickly because there is very little paperwork that needs to be done by the escrow company. This is why many people choose an all cash buyer.
Who Can Terminate Escrow?
Terminating escrow isn’t an easy process. Like many things in contracts, cancelling escrow generally requires mutual acceptance. Unless there is some form of unilateral cancellation provisions in the contract, one cannot simply terminate escrow without notice or agreement.
Depending on the way the contract is written, you may have a lot of rights in the contract. In others, you have very few. Ensure that you review the contract carefully, and if you have any questions, contact an attorney. Generally speaking, you rarely need to cancel a contract. As you are trying to close, not cancel!
Sell Your Tucson Home Fast!
Looking to sell your Tucson home fast? Want to get a fast, fair cash offer on an unwanted home that needs repair? KarlBuysHouses is a local, veteran owned real estate brokerage designed to help Tucsonans with their unwanted property needs.
I’ve been a Realtor, Real Estate Broker, and Investor for over 20 years in Tucson. I understand that there are some properties that aren’t fit for the Tucson MLS, and that a direct sale makes more sense. If you have a property that needs work, has damage, or otherwise needs to be disposed of, contact me directly for a fast, fair cash offer on your unwanted Tucson home!