Have you been watching Selling Sunset and wonder what it actually means when they come in their couture gowns to the office and shout, “we’re in escrow!” (We totally dress the same way at DBRE, btw.) Buying your first home is exciting — but it can also feel like learning a new language. One word you’ll hear a lot during the process is “escrow.” If you’re wondering,”What is escrow, exactly?” and why it matters to you, you’re not alone. Let’s break it down in simple terms.

What Is Escrow?

Escrow is basically a neutral, secure holding place for money and important documents until certain conditions are met in a transaction — like buying a home.

Think of escrow as a safety net for both the buyer and the seller.
It makes sure that:

• The buyer is serious about purchasing the home.

• The seller holds up their end of the deal (like completing repairs or providing clear ownership).

• No money or property changes hands until everyone’s agreed-upon terms are satisfied.
  

An independent third party — often a title company, attorney or escrow company — manages the escrow process.

How Escrow Works When You’re Buying a Home

Here’s a simple timeline of how escrow fits into your home purchase:

1. You Make an Offer

After you find the home you love, you make an offer. If the seller accepts it, you usually submit earnest money — a small deposit (typically 1–3% of the home’s price) — to show you’re serious. This money goes into an escrow account, not directly to the seller.

2. Escrow Opens

Once both sides agree, the escrow company opens a file. From this point, they collect important documents, like the purchase agreement, loan paperwork and title information.

3. Everyone Does Their Part

During escrow:

• The buyer arranges for a home inspection and finalizes financing.

• The seller completes any agreed-upon repairs and provides title documents.

• The escrow agent ensures everything is in order and that deadlines are met.

4. Closing the Deal

At closing, the escrow company handles the final steps:

• They distribute the money (paying off any existing mortgage, agent commissions and delivering the remaining funds to the seller).

• They file the deed with the county to officially transfer ownership to you.

• You get your keys — and your new home!

What Is an Escrow Account After You Buy?

Escrow doesn’t always end after you move in. Many lenders set up a mortgage escrow account to manage your property taxes and homeowners insurance.
Each month, part of your mortgage payment goes into this account. When taxes and insurance bills are due, the lender pays them on your behalf. It’s one less thing for you to worry about!

Why Escrow Is Important for First-Time Buyers

• It protects your money. Your earnest money isn’t handed over to the seller until everything is finalized.

• It keeps the process fair. An unbiased third party ensures both sides follow through on their promises.

• It simplifies complicated steps. You’ll have help managing paperwork, money transfers and legal filings.

Escrow might seem like just another real estate buzzword, but it’s actually there to protect you.
When you understand how escrow works, you can move through the home-buying process with more confidence — and a little less stress.

Ready to take the next step in your home-buying journey?
Let’s connect! We’d love to walk you through the process and help you find a place you’ll love to call home.