If your answer is NO, you’re not alone.
This past month, we watched Neighbors 2 (so funny – definitely recommend), and there is a scene where Wendy the Realtor explains what “escrow” is to Seth Rogan and Rose Byrne, a young married couple trying to sell their house to escape their horrible sorority neighbors. Watch it here but beware of foul language! If you can’t watch it, here’s the hilarious conversation:
Seth & Rose: You sold our house! You did it! Woooo!
Wendy the Realtor: Don’t get too psyched. You haven’t sold it yet. You’re in escrow.
Rose: What is this BS? Are you trying to **** us over? What does that mean?
Seth: What are you talking about?
Wendy the Realtor: I asked you months ago if you understood what escrow was, and you said yes.
Seth & Rose: (furrow their brows and blankly nod their heads) Well, uh… Just say it one more time… You know just refresh our, uh, memories.
Wendy the Realtor: It’s very simple. Escrow is a 30-day period where the buyer of the new house gets to do inspections and what not, and assuming everything goes well and nothing changes with the living situation that will, you know, spook them or something, you close. Okay?
Seth: So wait, do we have escrows on the other house we just bought in the suburbs?
Wendy the Realtor: You have NO escrow on that house.
Seth: WHY THE **** NOT?
Wendy the Realtor: You don’t remember? (shakes head) Because that house had multiple offers and you screamed at me, “Do whatever you have to do to get that house…”
Seth: (nods) Oh I remember that
Wendy the Realtor: …So I did it. So you have NO escrow there. And then I asked you three times, “DO YOU UNDERSTAND WHAT ESCROW IS?” (Seth and Rose furrow their brows and blankly nod their heads again) And once again, you just nodded. Just like you are right now. This is how the real estate crisis happened.”
This exchange made us laugh out loud, but it also made us realize that most people don’t understand what escrow is. Wendy the Realtor did a good job of putting it in layman’s terms, but below you will find a more detailed chart of what goes on during the escrow process (Click the image for a PDF version). If this chart scares you, don’t worry – that’s what we are here for! When you buy or sell a home with us, we’re with you every step of the way to explain what’s happening and answer any questions you have.
(adapted from Stewart Title)