Everyone wants to know what the heck an escrow is. If you watched our Facebook live yesterday you might already know about it, if you would like to watch it go to Annette Yorks Group on Facebook to watch. When people hear the word escrow it can be many different things. This can really depend on where the person is from or where they are living. When we say escrow here in Pennsylvania it has a different meaning to people living in the big cities.
Of course all of us love to watch Million Dollar Listings. You get to watch Frederik and Ryan list gorgeous homes in the hopes of putting them in “escrow.” You will hear them say a home is in escrow when it is sale pending. Here in Pennsylvania when a house goes under contract we just say that the home is pending. Again it really depends where the person is from.
When we talk about escrow here in State College or in other areas in Pennsylvania it means having an escrow account. An escrow to us is “putting something, such as a deed or money, in the custody of a neutral third party until certain conditions are met”. This can be with a title or an escrow company.
For example, we here at the Annette Yorks Group were getting ready to go to a closing yesterday when during the final walkthrough no heat was coming from the furnace. The seller was across the country working so of course could not help us.
This posed a real problem, not knowing if the little tank was also out of propane or if something had broken in the heating system. Annette had been there the night before and knew it had been working, but there was no way to tell for sure if something had happened. Of course no buyer wants to go to the closing table and buy a home that might not have working heat in the middle of October. The solution to closing was to escrow funds.
Funds were escrowed in case there was something more serious that the system needed. When drawing up the addendum the condition was that the funds were to be held with a neutral third party until the furnace produced heat. The seller wouldn’t get those funds until that condition was met. The buyer would only get the funds if heat wasn’t being produced even after filling up the propane.
After that addendum the closing was a go! I hope this blog taught you more about escrow. If you have any questions please feel free to contact us here at the Annette Yorks Group. We are here to help!