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What is an escrow, anyway?

There’s all this talk about “escrow;” it opens, we’re in escrow, it closes. What is “it,” anyway? What happens there? Who does what? This movie explains all.


If you’ve never bought a house before, you may be wondering about this mysterious thing called “Escrow.” It opens, it closes, we’re in it…what is “it,” anyway?

The escrow is just a neutral third party whose job it is to make sure everyone gets what they agreed to. The escrow officer, usually someone who works for a title company, coordinates all the many documents that make up your transaction.

After all the parts of the transaction have been brought together, the escrow officer will prepare the “instructions.” This document has all the numbers and terms that you and the seller have agreed on—and they have to match perfectly, or else the transaction can’t go forward. When you sign the buyer’s instructions and all the other paperwork, you’re saying that those are the terms you agreed to.

After you’ve signed your name a whole lot of times, the escrow officer puts everything into a “funding package” and sends it off to the lender. A day or two later, the money is wired into the escrow. This is called “funding.” Documents are then recorded at the County and you own the house. This is the Close of Escrow. Most of it happens behind the scenes, but we think it is good for you to know what that whole process is.

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