There is a long list of real estate lingo that can leave some people scratching their heads. Today, we’re going to talk about ‘escrow’ – but to best explain it, we’re going to begin with an anecdote.
When eBay first arrived around the turn of the century, there was a gaping hole in its core process. Buyers would bid and win, and sellers would want to sell their item – but the following back and forth was awkward. Each party was hesitant to send their end of the deal for fear that the other would back out! Buyers didn’t want to send their money until they received their item, and sellers didn’t want to send their item until they received their money. The lack of trust and assurance was a real problem for eBay, until Elon Musk invented PayPal to act as a middleman!
PayPal is to online transactions as escrow is to real estate transactions. Escrow is a neutral third party that holds the deed and funds in an account until the appropriate time. Once escrow is completed, the seller signs over the deed, the buyer signs over the money, and the transaction is recorded by this third party.
Escrow is an essential part of a successful transaction! We hope we’ve summed it up well. If you’d like to dive deeper into learning about escrow or have questions about any of the other real estate lingo, don’t hesitate to give us a call or an email – we love being a resource!
Contact us for a free, no-obligation market analysis. We are constantly talking to home buyers in the Portland area, and we can give you a precise idea of how a sale of your home would unfold in the current market.
P.S. Good news! Staff members are now licensed in Washington.
We want to be your go-to resource for information about real estate and the home-buying process in Oregon, and we’re happy to extend that to Washington as well. Contact us with your Washington real estate needs – we’re happy to help!