The Escrow Process, Explained (Without Making Your Eyes Glaze Over)

Congrats! If you made it here, chances are you are pretty close to selling or buying your home, and the escrow process is in your not-so-distant future—and that is something to be celebrated.

It may also mean that no matter how many times someone tries to explain escrow to you, you turn into Seth Rogen in The Neighbors and it all turns into a hazy blur as you try to process all that financial jargon. But it doesn’t have to be that way, and we’re here to help. Put simply, the escrow process is everything that happens between the moment your offer is accepted on a house to the moment it’s sold. (What often makes this confusing is that right after the offer is accepted, the buyer will give a good faith deposit to an escrow company—or third party—to show they’re serious about the sale, which is referred to as putting it “in escrow.”)

Typically, the escrow process takes between 30 to 45 days from start to finish. That may seem like a while, until you consider all of the different entities that need to work together to ensure that the sale goes through.

You know that phrase “don’t quit your day job?” Seriously—don’t. Becoming self-employed or other drastic changes to your income could impact your loan and, therefore, closing on the home, Mainville says.

Additionally, while you may be tempted to pre-order a few big-ticket items for your new home, it is best to wait until after closing when the lender is no longer reviewing your bank account and financials.

A lot of little things, actually. Whether or not you’re pre-approved for a mortgage can result in a time delay as well as varying time requirements for certain tasks (for example, lenders have both internal, state or federal regulations that they have to meet, which can be speedy…or slow).

There’s more: Inspections (for things like pests or environmental issues) can take longer than planned; so can locating documents, which means the more you have ready to go, the better. Some lenders require repairs on the property to be completed before escrow is done. In addition, sometimes delays are simply a result of missed signatures. (It happens more often than you think.)

You want to find a company that really knows what they’re doing. Read the reviews, talk to your realtor, poll local neighborhood groups. A disorganized escrow company can wreak havoc on your efforts to move things along, so do your homework to find a real pro.

Yes. If something goes wrong during the escrow process, the home may “fall out of escrow,” and the sale won’t go through. This can happen for a variety of reasons, including the buyer didn’t qualify for financing, the inspection reveals complications, the appraisal is lower than the accepted offer or the buyer wants to pull out of the sale.

Buying and selling a home can be stressful, but once you’ve made it to the escrow process, it’s the beginning of the end—in the best way. While it can take anywhere from a month to a month-and-a-half to complete the sale once in escrow, the time goes by quickly thanks to the title, escrow and lending companies all working together efficiently to get the house sold.

Once the buyer has done their part with deposits, inspections and negotiations, the other key players take over to complete all remaining paperwork, finalize the loan and confirm financials before changing the “For Sale” sign to “Sold.”