Escrow Period: What You Need to Know

Everything You Need to Know About the Escrow PeriodBuying a home can be a long and somewhat complicated process. The period between when the purchase contract is signed and closing is often called the "escrow period". The escrow period is a big part of the home buying process, but not all home buyers know what the escrow period is and what happens while it's happening. Chugiak new home buyers who understand the escrow period are more prepared for the home buying process. This FAQ can help home buyers who are not sure what happens during escrow.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

When Does the Escrow Period Begin and End?

The escrow period begins when a home buyer makes an offer on a home and the seller accepts the offer. The escrow period ends when the buyer's loan has funded. If the buyer is paying for the house in cash, the escrow period ends when the money has transferred from the buyer to the seller. At the end of the escrow period, the buyer gets keys to the house.

What Are the Responsibilities of the Home Buyer During the Escrow Period?

The responsibilities of the home buyer during the escrow period vary from one home sale to the next - or from one state to the next. The real estate professional can help the buyer determine what their responsibilities are based on the details of the home sale.


If the buyer is paying for the home with a mortgage loan, the lender will usually require an appraisal of the home being purchased. Often the lender makes the arrangements for the appraiser to come to the home, but, in most cases. the buyer will pay the appraiser's fees. This payment is often a part of the closing costs at the end of the escrow period.

Home Inspection

Home inspections are not usually required, but they are a useful tool for home buyers who want to ensure that the house they're buying is in good condition. Most buyers get the inspection during the escrow period, although some buyers will get an inspection before the escrow period begins. After the home inspection, and according to the terms of the purchase agreement, the buyer can negotiate repairs or credits for repairs. In some cases, the buyer may seek no repairs but an adjustment of the price of the home. This negotiation process must be finished and the home inspection contingency must be lifted in order for the purchase of the home to proceed.

Home Insurance

If the buyer is getting a loan, the home buyer will be asked to get a homeowners insurance policy that can be in place when escrow ends. If the home buyer does not get an insurance policy by the time escrow closes, the loan will not fund. Usually the cost of the homeowners insurance is covered in the closing costs.

Down Payment and Earnest Money

The home buyer usually makes an earnest money payment at the start of the escrow period. Usually the earnest money payment is a small percentage of the purchase price of the home. When escrow closes, the earnest money is rolled over into the down payment, which also must be paid at the close of escrow. Altogether, the home buyer may need to pay as little as 3.5% for the down payment, and as much as 20% or more. Whether or not there is a down payment and how much the down payment amounts to depends on the type of mortgage loan the buyer has agreed to.

What Are the Responsibilities of the Seller During the Escrow Period?

During the escrow period, the home usually agrees to give access to the various professionals who come to the house on behalf of the buyer, such as the appraiser and the home inspector. The seller must also pack their personal items and prepare to vacate the home. If the buyer and seller negotiate repairs, those repairs must be made before escrow closes.

How Long Does the Escrow Period Last?

The escrow period usually lasts about 30 to 60 days. The actual length of time may depend on many factors. Sometimes sellers or buyers will negotiate a longer period of time, if it is needed for moving or other logistics.

Contact a Real Estate Professional for More Help

If you're a home buyer who needs more help with the escrow period, contact a real estate professional. Your real estate professional can answer any questions you might have about escrow, and can also help you make smart decisions throughout the home buying process.

For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.

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