Plenty of my first-time real estate buyer clients ask, “why do I have to wire money into an escrow account when buying a house”? I’m sure you’ll have a clearer picture of the home buying escrow process by the end of this article. I do my best to keep my real estate articles short and sweet so you won’t fall asleep. Here we go!
We love this house…Now what?
After you identify a home that you’d like to buy, your real estate agent will help you write an offer or purchase contract. Typically depositing 3% is common practice within 72 hours of opening escrow when buying real estate in southern California. The EMD (earnest money deposit) is a sign of your good faith and allows you additional time when seeking to finance and complete your due diligence on a property.
Who is escrow anyway?
Escrow and an escrow officer (the person who handles the sale) is a neutral third party protecting the interests of both you (the buyer) and the seller. Typically the seller chooses the escrow company, but I want to make this crystal clear. Escrow doesn’t work for the seller. Escrow is a third party who manages a trust account, in which the agreed upon money is held for the sale. The money is held until both the seller and buyer fulfill their contractual obligations.
Earnest Money Deposit
The earnest money deposit is usually the first money to be transferred into escrow. Most of my real estate buyer clients wire transfer funds from their bank account into the escrow account. This wire transfer is used to cover the closing costs which can include an impound account for taxes and insurance. The earnest money is also an insurance policy for the sellers in the event the buyers do not perform the transaction beyond the contingency dates or are operating in bad faith, that money is available for seller damages. I have never lost my buyer’s money.
Los Feliz Real Estate Sold by Glenn Shelhamer
This article, Why Do I Have To Put Money In Escrow When Buying A House?, was provided by Glenn Shelhamer of The Shelhamer Real Estate Group. If you are selling your Los Feliz home, I have a comprehensive marketing plan, including preparing your Los Feliz home properly that will help get your home sold in less time and for more money. Call me at 310-913-9477 or contact me to discuss how I will get your home sold.
Original Source: LosFelizHouse.com