inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
Frank Lumia Real Estate Plus!
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
There's Magic In Our Mountains.™
  • Home
  • Fair Housing
  • SOP
  • Our Listings
    • Otsego/Delaware MLS
    • Ulster
  • Agents
  • About Us
    • Office Locations
    • Contact
    • Testimonials
  • Let Us Help!
    • Buyers
    • Rentals
    • Subscribe Here!
    • What’s Your Home Worth?
    • Explore the Catskills
    • Area Information
    • NYC Watershed Lands
    • Looking to Build?
    • Blog
    • Market Health
Frank Lumia Real Estate Plus!
Get in touch and let the magic happen!
(607) 746-6029
(845) 586-4486
replus@franklumiarealestate.com
37LU0818789
Sign In
Sign Up
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
Frank Lumia Real Estate Plus!
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
There's Magic In Our Mountains.™
  • Home
  • Fair Housing
  • SOP
  • Our Listings
    • Otsego/Delaware MLS
    • Ulster
  • Agents
  • About Us
    • Office Locations
    • Contact
    • Testimonials
  • Let Us Help!
    • Buyers
    • Rentals
    • Subscribe Here!
    • What’s Your Home Worth?
    • Explore the Catskills
    • Area Information
    • NYC Watershed Lands
    • Looking to Build?
    • Blog
    • Market Health
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
Frank Lumia Real Estate Plus!
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/09/edb685a0f618d7e250619d787d3518ca676b3ccb.png
There's Magic In Our Mountains.™

Be Informed: What is Escrow?

inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/02/flreplogo2office-2.png
Frank Lumia Real Estate Plus! ,04/18/2021

The first time you heard the term, "escrow" you may have been thrown for a loop. While the word may have had you confused the first time, here are some essential things to know about escrow--what it is, what it's used for, and how it works. 

 

What Is Escrow?

Escrow is a legal notion where money or assets are held by a third-party on behalf of two other parties in the middle of completing a transaction. 

An escrow company provides two parties the service to make sure everyone does what they say they're going to do. The escrow company acts as a middleman to protect the assets while the home purchasing process is happening.  

Applied to real estate transactions--when buying or selling a home, escrow is the trusted third-party, who is someone other than the buyer or seller, who will hold money to make sure you execute the transaction correctly.

The key thing to remember here is that the third-party is a trusted party. This is a neutral entity that doesn't care whether a home buyer or home seller comes out ahead of the other. The primary role of an escrow service is to make sure each party in a real estate transaction holds up its end of the deal. 

Search for a reputable escrow company, or ask your real estate agent for a recommendation to find a trustworthy service.

 

How Escrow Works When Purchasing A Home

When buying a new home, you agree to pay the purchase amount within a certain time, and the seller will provide the home they're selling. Your home purchase is probably contingent on a few things; namely financing and a home inspection. While you're securing financing and scheduling a professional home inspection, you will make an escrow payment, or an "earnest deposit," writing a check to an escrow provider in an agreed-upon amount that shows your intent or seriousness of purchasing that home. This gives the seller some reassurance that you're serious.

Escrow opens when a buyer and seller sign an agreement for a real estate transaction, then deliver the agreement to an escrow officer who helps make sure everyone meets the contract conditions. 

Escrow closes when everyone did everything they agreed to do, and the homeownership is transferred to the buyer.

Once the escrow provider verifies everyone held up their end of the agreement, they'll either give you a refund, apply it to the purchase price or the home, or pass the money along to the seller (if the buyer doesn't satisfy requirements). 

 

Escrow Accounts For Homeowners Insurance And Property Taxes

The other time you'll hear about escrow may be for an escrow account--which is slightly different than for a real estate transaction. When making your monthly mortgage payments on your home loan, you may also be paying for additional home expenses like property taxes and homeowner's insurance as part of one lump sum.

Property taxes are usually an annual expense, and sometimes homeowner's insurance is as well, though many insurance companies accept monthly payments. To alleviate the lender's risk of you not budgeting properly for these payments, they make sure tax and insurance get paid by adding them to your monthly mortgage payment. 

This portion of your monthly payment is deposited into a separate, escrow account. These funds are kept in escrow (by a company outside of both you and your lender) until their respective payments are due once a year, then they'll make the payment on your behalf. You'll discuss this with your lender when you finalize the purchase of your home, so it shouldn't be a surprise. 

If there's a difference in how much you owe and how much you've contributed to the escrow account, your lender will let you know. You'll either receive a refund if you overpaid, or if you didn't contribute enough, your lender will pay the difference, then send you a bill for the additional amount. You may be able to pay the bill over the coming year.

If you need help finding an escrow company or have any questions about the escrow process for real estate, get in touch! 
Print Details
Previous post
Next post
How To Manage Stress When Dealing With Home Financing
5 Gorgeous Kitchen Trends That Won't Disappoint

Have a question?

SEND
Submitting
Succes! Your message was sent!
There's Magic in Our Mountains!
Oops! Error occurred.

Search listings

Enter city, zip, neighborhood, address…
Loading in progress…
No results found
Type in anything you’re looking for
Search
GRI
SFR
ABR
EHO
NAR Green
BPOR
GRI
SFR
ABR
EHO
NAR Green
BPOR

Office

Frank Lumia Real Estate Plus
78 Main StreetDelhi
New York 13753
607-746-6029
607-386-2284
replus@franklumiarealestate.com

Find the perfect home

  • Home
  • Fair Housing
  • About Us
  • Our Listings
  • Search The MLS
  • Rentals
  • Let Us Help!
  • Explore the Catskills

Consumer Protection & Privacy

  • Accessibility
  • DMCA Compliance
For ADA assistance, please email compliance@placester.com. If you experience difficulty in accessing any part of this website, email us.
inception-app-prod/NWY5ZjQ5MDAtNGIzNC00YWRmLWE1MzMtYWJmN2E0NDcyMjkx/content/2021/02/flreplogo2office.png
There's Magic In Our Mountains.™

© 2022 All rights reserved

Created with Placester

Sign in

Sign in with your email address

Sign In
Forgot your password?
Create an account
You have been successfully logged in
The page will reload automatically.
Go to the homepage
Sorry something went wrong
Login or password are incorrect. Please try again.
Try again

Sign Up

Sign Up
Already a User? Sign In
You have been successfully registered
Please check your email.
Go to the homepage
Sorry something went wrong
Please try again.
Try again

Reset password

Enter your email address

Reset password
Return to Log In
Reset password email has been sent.
Go to the homepage
Sorry something went wrong
Please try again.
Try again

Change password

Change password
Your password has been successfully reset.
Go to the homepage
Sorry something went wrong
Please try again.
Try again
Send
Succes! Your message was sent!
Back to homepage
Oops! Error occurred.
Please try again.
Back to form
Already a User? Sign In

Account verification in progress

Please wait...

Account Verified!

You may now log in into your account
Go to the homepage

Verify your email address

In order to log in to your account, you need to confirm your email address. Please check your inbox!
Go to the homepage

Share this listing

Copy Link