Real Estate Term of the Day – In Escrow
“In Escrow” is a temporary condition of a piece of property that has been transferred to a third party with the intentions of delivery as part of a binding agreement. Escrowed items are most commonly found in real estate transactions, and everything associated with the sale is often held in escrow until all specified conditions are met and transfer of ownership can occur. While specific escrow agents exist, most of the time your attorney can act as an escrow agent to make arrangements.
While a property is in escrow, the buyer cannot take possession of the space or occupy it. Real estate deals must clear a series of stages during the escrow process. An appraisal of the property must be conducted if it has not already been done. There may be issues with the transaction if the appraised value of the property is lower than the agreed upon purchase price. Lenders will not disburse financing that is above an appraised value regardless of what deal price the parties committed to. If the buyer cannot make up the difference while the property is in escrow, the transaction might be terminated.