Going through escrow can feel overwhelming, especially for first-time homebuyers. In Florida, purchasing a home requires several steps, with the escrow process being one of the most important.
Knowing the steps involved in escrow helps buyers feel more confident and prepared during their real estate journey.
Escrow account
Once the purchase agreement is signed, the buyer deposits money into an escrow account. The escrow agent, usually a title company, manages this account. The agent ensures that all parties meet the terms of the agreement before releasing any funds.
Title search and insurance
The escrow agent conducts a title search to confirm that the property title is clear. This search ensures there are no liens, disputes or other issues with ownership. After the title search, the buyer typically purchases title insurance to protect against future claims.
Home inspection and appraisal
During escrow, the buyer arranges for a home inspection and appraisal. The inspection checks for any issues with the property, while the appraisal confirms its market value. These steps are necessary to ensure the buyer is making a sound investment.
Documents and disclosures
Both the buyer and seller must review and sign several documents. These include disclosures about the property’s condition, any repairs needed and other important information. The escrow agent ensures all documents are accurate and complete.
Loan finalization
If the buyer is financing the purchase, the lender will finalize the loan during escrow. The lender reviews the appraisal and inspection reports, verifies the buyer’s financial information, and prepares the loan documents for signing.
The closing
The escrow agent schedules the closing once all parties meet the conditions. At the closing, both parties sign the final documents, and the buyer pays any remaining costs. The agent then releases the funds to the seller and records the new deed with the county.
By understanding the escrow process, you can make informed decisions and close your property deal with ease.