An Escrow Deposit, also known as an Earnest Money Deposit, is money that a homebuyer puts down as a sign of good faith when purchasing a home.
Escrow is a process that provides for a fair and equitable transfer of property from one person to another.
Escrow opens when the buyer and seller sign a sales contract, commonly called a Real Estate Purchase Agreement and a deposit is paid. The contract, along with any additional instructions, serves as instructions for the escrow officer in terms of accounting for Escrow and release of Escrow funds.
Escrow assures that the lender releases the home purchase funds at or about the same time that the deed is recorded to reflect new ownership. Escrow includes depositing, with a neutral third party, funds, documents and instructions necessary to complete the transfer.
The amount of time necessary to complete the escrow is determined by the terms of the Real Estate Purchase Agreement or the time taken to process your loan. It is normally 45 to 60 days, but can range from a few days to several months.
