What Is Escrow? A Plain-English Guide for Homebuyers

This is probably the most common first-time homebuyer question, and probably the one no one really wants to ask out loud.

The term escrow describes the period between offer acceptance and when you actually get your keys. It usually lasts around 30 days, but it can be faster or longer depending on the specifics of your situation.

What happens during escrow

The escrow company holds your initial deposit, usually 3% of the purchase price in Marin County. The appraiser provides the appraisal report, and your lender reviews your paperwork and gives final approval of your mortgage.

If you have an inspection period written into your offer, you’ll also use this time for all your investigations of the property. This often includes a general home inspection and a pest (wood-destroying organisms) inspection. Sometimes the seller provides these reports up front so you can review them before making an offer.

The title and escrow company also issues title insurance, which makes sure there are no liens on the property or unseen transfers of ownership that could come back and bite you later.

Closing

Once all of that is complete, the lender funds your loan, the escrow company distributes funds to everyone involved, the deed is recorded, and you get the keys to your beautiful new home!

An example escrow timeline