In real estate transactions, escrow is an independent deposit of funds in which all parties' interests are protected. The funds are delivered after a specific condition or event is completed. When they open an escrow account, the buyer and seller of real property establish conditions for ownership to be transferred and provide these conditions to a neutral party (the escrow holder). The escrow holder must make sure the conditions are met. Generally, the escrow holds the funds for a down payment, the deed, and other necessary documents. An escrow account ensures that no funds or property title will be transferred until the terms of the sale have been met. If you are concerned about the escrow period related to a property transaction, you should consult the experienced Boston real estate lawyers at Pulgini & Norton.Understanding the Escrow Period
The most legally complex steps of a residential real estate sale may be the escrow period and the closing. The escrow period is the time between the signing of the real estate contract and the closing date, as specified in the purchase contract. In most cases, it is between 30 and 60 days. The contract will usually include a number of contingencies. The homebuyer will have to take care of specific tasks during the escrow period, such as hiring an inspector, reviewing the report, negotiating with the seller to make sure repairs are made, and deciding to cancel the contract if there are defects that cannot be repaired. In most cases, the buyer will also have to secure title insurance and homeowners' insurance.
During the escrow period, the bank may be appraising the property and reviewing the buyer's loan in order to prepare for an approval and issuance. The seller may also have certain tasks to perform. In some cases, the seller will be responsible for making necessary repairs or clearing some cloud on the title.
The escrow holder or agent is a third party that facilitates the exchange of funds for property title. Before escrow closes, the buyer will deposit the required funds. The escrow instructions are created by the buyer, seller, and lender, and they will advise the holder as to how the relevant funds and documents are to be handled. Often, the escrow holder or agent will hold a buyer's earnest money, order a title search, hold any money loaned to the buyer by the bank, obtain and hold the seller's deed, and calculate what is owed for property tax or homeowners' association transfer fees. Usually, the documents specify that the buyer's money will not be released to the seller until the deed is recorded and the title insurance policy is delivered to the buyer. It is important to have an attorney to make sure that both parties understand the contract terms and contingencies during the escrow period.
When the escrow closing occurs, legal title is transferred from the seller to the buyer. A grant deed is recorded, and final closing papers are disbursed.Consult a Boston Lawyer for a Real Estate Transaction
When you are buying a home, it is crucial that you understand what needs to be done during the escrow period and at closing. At Pulgini & Norton, our Boston real estate attorneys understand the importance of making your transaction proceed smoothly. We also advise and represent people in Braintree, Quincy, New Bedford, and other cities in Massachusetts. Call our closings attorneys at 781-843-2200 or contact us via our online form for a free consultation.