16 Jan Escrow FAQ: When does escrow actually “open”?
When you’ve decided on the house that is “the” house for you and your family, you make what’s called a “good faith” deposit. This money goes into the agent’s “escrow account” until details of the purchase agreement have been solidified between the buyer and seller. Once the purchase agreement is complete, the money in the escrow account is transferred to an “escrow agent.”
This stage of the process is called “escrow.” Escrow is considered “open” as soon as the buyer’s good faith deposit reaches the escrow agent / escrow company (stand-ins may be a title company, an attorney, or any agent authorized by your state to “close” a real estate transaction). It is at this point that an escrow agent and a unique file number are both assigned to the account.
This escrow agent will be responsible for tracking escrow through to closing. He or she will also be the point of contact for parties involved in the transaction (buyers and sellers) and will have the ability to give ongoing status and answer any questions regarding everything in the escrow process – from title search to insurance. Once all the documents have been gathered and signed, money “officially” changes hands, and escrow (and the transaction / sale) is deemed “closed.”