What is Escrow in the home buying process of real estate

So, A lot of new or first-time home-buyers do not really understand many terms in real estate and what to expect in their journey to buying a home. And that’s okay, I am here to explain to you what it is.  A common term you will hear about is Escrow. 

What is Escrow? You will often hear this term from your agent and they will tell you, oh we are now in escrow.

To make it less complicated, I have adopted what my teacher in real estate said in his classes. It is a neutral 3rd party vendor that protects the integrity of the transaction. 

Essentially when you buy your first home, your real estate agent will write up a residential purchase agreement for you which would state the terms of the transaction including how much down payment you are willing to make, the purchase price of the home etc. Once your offer had been accepted by the seller, the documents then go to a process called escrow. They are a neutral 3rd party vendor that makes sure the transaction goes through. Their job is to make sure that everything is done the right way. They hold your down payment and essentially the buyer and the seller will get some escrow instruction where all of the transactions agreed upon by both parties are written out. Whether this may be what home appraisal, inspection or pest inspection to use etc. 

Understand that they do not take sides whether you are the seller or the buyer. Their interest is solely to make sure the transaction goes smoothly. They want you to close and get your keys to your new home that way they get paid too. And if you are the seller, you get paid by the bank and the buyer also. Now, all parties are happy. 

Make sure to pay attention to the escrow instructions and if there is something that does not look right or you find discrepancies be sure to let your real estate agent know. And that’s pretty much it. 

If you have any other real estate terms you would like to know about, please email me and let’s discuss it at

If you are located in California and specifically looking for a new home around the area of Pittsburg, Antioch, Brentwood, Walnut creek, Concord and Martinez, feel free to contact me at 925-490-2555. I will be happy to assist you in finding your dream home. I am a real estate agent that specialize in this area. I call the east bay home for many years now and I am very knowledgeable and specialize in this market.

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