Escrow Process & Information
Understanding escrow in Utah real estate transactions
What is Escrow?
Escrow is a crucial part of the real estate transaction process that protects both buyers and sellers by ensuring all conditions are met before funds and property change hands.
1
Opening Escrow
Once your offer is accepted, escrow is opened with a neutral third party to hold funds and documents.
2
Deposit Earnest Money
Your earnest money deposit is held in escrow as a sign of good faith and commitment to the purchase.
3
Contingency Period
During this time, inspections, appraisals, and loan approval are completed. You can back out if issues arise.
4
Final Walkthrough
Inspect the property one final time to ensure it's in the agreed-upon condition.
5
Closing Day
Sign all documents, pay closing costs, and receive the keys to your new home.
Key Escrow Terms
Earnest Money
A deposit made by the buyer to show good faith and commitment to the purchase. Typically 1-3% of the purchase price.
Contingencies
Conditions that must be met for the sale to proceed, such as inspection, appraisal, and loan approval.
Title Insurance
Protection against title defects that could affect ownership rights to the property.
Closing Costs
Various fees and expenses associated with finalizing the real estate transaction.
Frequently Asked Questions
What is escrow?
Escrow is a neutral third-party process where funds and documents are held securely until all conditions of the real estate transaction are met. It protects both buyers and sellers during the home buying process.
How long does escrow typically take?
Escrow typically takes 30-45 days, depending on the complexity of the transaction, loan processing time, and any contingencies that need to be resolved.
What happens to my earnest money if the deal falls through?
It depends on the reason for cancellation. If you cancel within your contingency periods (inspection, appraisal, loan), you typically get your earnest money back. If you cancel outside these periods, the seller may be entitled to keep it.
Can I choose my own escrow company?
In Utah, either the buyer or seller can choose the escrow company, but it's typically negotiated during the offer process. Both parties must agree on the choice.
What are closing costs and who pays them?
Closing costs include various fees like title insurance, escrow fees, loan origination fees, and more. In Utah, these are typically split between buyer and seller, but the exact split is negotiable.
Need Help with Your Transaction?
Our experienced team can guide you through every step of the escrow process.