By Melanie Jensen

 

Congratulations. You are officially on your way to owning your home. Once your offer is accepted, you enter escrow. This stage brings everything together, and each step matters.

When you understand how escrow works, you stay in control, avoid delays, and move to closing with confidence.

 
What Is Escrow?
Escrow is the process where a neutral third party manages the transaction. The escrow or title company holds funds, coordinates documents, and ensures both buyer and seller meet the terms of the contract.

This process protects everyone involved and keeps the transaction organized from contract to closing.

 
Your Earnest Money Deposit
You will submit an earnest money deposit shortly after your offer is accepted. This shows the seller you are serious about moving forward.

Key things to know:

-The escrow or title company holds your deposit in a secure account

-Your deposit applies toward your purchase at closing

-You must have funds ready when you submit the deposit

-If you cancel the contract within your contingency timelines, you typically receive your deposit back. If you miss deadlines or default on the contract, the seller may claim the deposit as liquidated damages.

 
Your Down Payment
Your loan type determines your down payment. Options range from low down payment programs to larger contributions.

A higher down payment can:

-Lower your monthly payment

-Reduce your loan amount

-Improve your loan terms in some cases

-Choose a number that supports your long-term financial comfort, not just approval limits.

 
Escrow timelines often run around 30 days, but your contract controls