What is escrow as it applies to Boston real estate? – You could say that escrow is comprised of three things:
- A type of bank account. An escrow account a separate independent bank account. For the purposes of real estate transactions, the buyer can have their money held by a trusted third party. Meanwhile, the seller can proceed with the sale confident that the earnest money and down payment are waiting for them in the escrow account, and will be released to them when the deal closes (along with the rest of the funds, either from the buyer or their lender).
- A contractual agreement. Having money in escrow to buy a downtown Boston condo means that the seller must complete their end of the bargain — getting the Beacon Hill home inspected, potentially negotiate repairs, and having the title inspected as well. When we as real estate brokers say a condo is “in escrow”, we mean it is sold unless the buyer or seller backs out of the deal. If that does happen, you’ll often hear that a home “fell out of escrow”.
- A period of time. Usually, escrow lasts about 30-45 days. The word “escrow” is sometimes used to just refer to that length of time.
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