Buying or selling a home can get tricky. So, it’s no surprise why many people feel overwhelmed when it comes to real estate transactions. However, various professionals can help you in this process.
If you hire the right escrow company, your home buying or selling process can be simpler and more profitable. The right escrow company that can manage your affairs professionally can make the whole process smooth without any delays or difficulties. That’s why it’s vital to find the right escrow company for you, as some may be more suitable for some people, while other companies may be better for others.
In this article, you will learn how to choose the best escrow company for you and your needs, so keep reading!
Table of Contents
What Is an Escrow Company?
An escrow company, such as Lightspeed Escrow, is a neutral third party that facilitates financial transactions between the principals in the transaction. In other words, escrow is an agreement between two or more parties whereby they keep their money or assets in an escrow account until specific conditions are met, and the money or assets are allocated.
That said, the escrow company is the neutral party that handles the money or assets held in escrow and ensures that the agreed-upon conditions are met.
What Is the Function of an Escrow Company?
The function of an escrow company is to facilitate a transaction and ensure everything is done as expediently as possible. Escrow companies primarily deal with real estate, but they can also facilitate other types of financial transactions that demand special care.
While there are many moving parts to any transaction, the role of an escrow company can come down to:
- Holding the assets or funds of the seller and the buyer
- Making sure that the seller doesn’t get the funds until the conditions are met
- Ensuring the buyer doesn’t get the right to a property or other asset until the conditions are met.
For example, if you’re selling a home and find a buyer and sign a purchase agreement, specific conditions need to be met for the sale to go through. Many documents need to be signed, the buyer may need to take out a loan, earnest money must be deposited, and there can be contingencies in the purchase agreement.
All the necessary documents, the funds, and the deed to the property will be held by the escrow company in a separate account until both the seller and the buyer have completed their part of the agreement. Once everyone has fulfilled their duties, the deal can through, and when the sale is completed, it’s time to close the escrow.
Qualities of an Excellent Escrow Company
Below are some vital qualities to look for in an escrow company:
- They value your time
- They are transparent
- They are experts and can handle different escrow accounts
These qualities are critical because you don’t want to be unsure of how your money or property is handled during one of the most significant transactions of your life.
5 Tips for Choosing the Right Escrow Company
The escrow company acts as an intermediary and a safety net for all parties involved in a transaction, meaning you’re placing a lot of trust in your escrow company. This means you should carefully choose the escrow company that should facilitate your transaction. That said, here are five tips for picking the right escrow company for you.
Consider Their Reputation
It’s vital to look for an escrow company with a good reputation. Do the proper research to find a company that has excellent reviews, is highly rated, is recommended by others, and is ethical.
An effective way to look into a company’s reputation is to read customer reviews on different websites. Past and current clients are typically honest about their experiences. And after reading enough reviews, you should have a good idea of the reputation of various escrow companies.
Communication Style Matters
It’s a good idea to choose an escrow company with a similar communication style as you. Look for a company that presents information clearly, is quick to respond, is straightforward, and is transparent. Companies with these communication qualities are typically a much better choice than those with vague information and slow response times.
Consider Their Resources and Experience
Choosing an escrow company with many resources and staff with years of experience is vital. To find out their resources and how skilled they are, call the office and ask whatever questions you might have.
Location Is Important
It’s always better to choose an escrow company that operates in the area where you’re making a real estate transaction. Also, ensure that the company of your choice understands the real estate market in that area because many states and counties slightly differ in the way real estate transactions are done.
Compare Prices
Finally, you should compare prices between various escrow companies to make sure you get the most favorable deal. Most companies show their base prices on their websites so you can compare various companies. However, other fees also contribute to the overall cost. That’s why it’s a good idea to contact different companies and ask them about their pricing.
Familiarize yourself with the costs regarding the real estate transaction, escrow service fees, title insurance, etc. And if an escrow company easily communicates these costs, it’s worth considering.
Know What You Are Getting Yourself Into
After reading this article, you have a good idea about how to choose the right escrow company for you. Picking the best company will help the real estate transaction run smoothly, protecting both the buyer and the seller.
You will want to look into their reputation as a company, communication style, level of expertise, office location, and pricing. Once you’ve done your research, you’ll have a good idea about which company is best for you and your needs.