Escrow, explained simply
Escrow can sound like legal jargon, but the idea is simple: a neutral third party holds funds and documents until everyone has met their end of the deal. Here’s exactly how it works for buyers and sellers in Central Florida.
Clarifying the Escrow Process
Four pieces that make up how escrow actually works, from opening to closing.
What Is Escrow?
Escrow is money held by a neutral third party during a transaction between a buyer and seller — similar to how PayPal holds funds for an online purchase until both sides are satisfied.
Role of the Escrow Holder
The escrow holder makes sure every term and condition agreed to by the buyer and seller is actually met before the sale is finalized — keeping the transaction on track and on time.
Documents Escrow Compiles
Loan documents, tax statements, insurance policies, title insurance, terms of sale, and payment requests to be paid out of escrow funds are all gathered and tracked.
Closing & Final Payment
Once every escrow step is complete and expenses are paid, title transfers to you, title insurance begins, and a final payment to the escrow company closes things out.
Lifestyle & Real Estate
Practical details to know before you sit down at the closing table.
Mortgage Escrow Account
What It Covers
A Mortgage Escrow Account covers recurring fees — like property taxes and insurance — for as long as there’s a loan on the home. It’s typically partially funded at closing, with ongoing contributions built into your monthly mortgage payment.
What's Included in Escrow
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale & any seller-assisted financing
What You'll Pay at Closing
Before closing, expect to settle expenses such as title insurance, inspections, and real estate commissions. Once those are paid, the property title transfers to you and a final payment to the escrow company wraps things up — your REALTOR® will let you know the acceptable payment methods ahead of time.
Have questions about escrow?
Every lender and escrow company works a little differently. Browse homes on the market or talk to our team about what escrow will look like for your specific transaction.
Coach Gar Real Estate · Serving Orlando & Central Florida · Licensed Florida Real Estate Broker