The Escrow

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

 Escrow is the purgatory of the real estate world.

You’re perched somewhere right in between euphoria and a panic attack. As soon as the purchase agreement is drawn up, all of the complicated paperwork begins (this is when you realize how much you needed an agent).


Three things are taken care of in escrow: (and detailed below)

  1. The appraisal/inspection of the property
  2. The mortgage/loan
  3. The title



Basically, this is where all the parts come together to form a perfect bow (or a knot- depending on the circumstances).

The home inspection/appraisal process ensures that you aren’t paying more than the property is worth- and discloses any information you might need about issues with the house. This is where you might find out about a maintenance issue that was never addressed or things that need repairing- which can alter the price in the contract.

You’ll also be glad you were pre-approved for that mortgage or loan at the beginning- you’re welcome for saving you from even more stress. At that point, you weren’t locked in. Now is when you decide on one lender to go with and cross those T’s and dot those I’s.

Then comes the title, which ensures that the property and all parts of it are transferred to the new owner(s). Basically, for tax purposes.


Shopping For Insurance

The minute the property is transferred to your name, any damage falls on you- the bearer of complete responsibility. That’s why, during the escrow, it’s a good idea to get your insurance all lined up and ready for the minute it is transferred to you. That way, if there’s a lightning storm the night that you close escrow and a tree falls on that beautiful colonial porch, you’re covered. You’d be shocked by how many homeowners don’t have proper homeowner’s insurance. Fortunately, it’s become standard operating procedure for obtaining mortgages, but chances are, your standard policy will include wind, hail, fire, and theft- mostly for things that would occur suddenly and be accidental. However, a sudden roof collapse from old age would likely not be covered. Then what?


My4 reaction football soccer upset GIF


The most common mistake homeowners make when purchasing insurance is not knowing exactly what their policy covers. This is why it’s important to shop around for insurance providers before settling with a policy. You want someone honest, thorough, and well-educated about the area. Ask your Element Realty agent for their recommendations- or see our recommended vendors page on