Step 6.  Closing and Escrow for buyers

Once final agreement has been reached, you and the seller move onto the next step, closing.

Closing is the penultimate stage of the whole sales process overseen by an escrow company. So what is escrow? Escrow acts as an independent and neutral third party whose primary responsibility is to close the sale transaction as outlined in the sales contract. The escrow agent acts as a guardian over the process and makes sure that both the seller and the buyer adhere to their sides of the bargain.

When I bought my own home (before becoming a real estate agent), I was pretty confused by what was going on during the whole escrow & closing process. It made financing look relatively simple by comparison! I was too busy running around gathering paperwork for the lender and the next minute I was sitting in front of a mountain of paper at the closing. If you refinance or buy another home, the process will be a lot more obvious the second time around.

Escrow is the equivalent of PayPal.  First, you purchase a piece of burned toast on eBay that appears to have Elvis' face on it. When you get delivery of the Elvis toast, the money you paid is released to the seller by an independent 3rd party, i.e. PayPal (in theory at least)

In Washington State real estate, Escrow's responsibilities include:
• Acting as intermediary among various interested parties. This includes lenders and lien holders.
• Ensuring that the title to the property is marketable, in other words, is the seller legally entitled to sell the property?
• Facilitating the signing of all closing and lender documents,
• Receiving, holding and disbursing the funds involved in the sale including the buyers earnest money.
• Responsible for ensuring that the appropriate security documents are recorded with the County Recorder.

There are multiple escrow companies in the Seattle area but all must abide by the same code of conduct and state regulations. The seller's side will usually choose the escrow company but both of you will pay escrow fees.


Please click here for these items related to Escrow and Closing:

List of escrow steps to close a real estate transaction
The most important items to keep an eye on during closing


Continue to Buyer's step 7.  Show me the keys!

Return to Buyer's step 5.  Making and negotiating offers