Escrow is the time period from the point at which a seller has accepted an offer on their Rhode Island property up until the buyer is handed the keys and assumes ownership. This makes it somewhat of a limbo state for the property as ownership transitions from the seller to the buyer. Escrow begins as soon as the seller accepts a purchase offer and ends as soon as the buyer has taken possession of the property.
Where to begin
To start escrow, you’ll need to open an account. You will use this for all holdable payment types such as deposits.
You can then use your escrow account to keep your funds safe and secure. But these types of accounts aren’t just for money. Your escrow account is also useful to safely hold other valuables like personal finance documents and property deeds.
Before they’re allowed to officially claim ownership of the property and move into their new home, a buyer has to allow all parts of the escrow process to unfold to completion. This includes:
- Bank approval
- Secure financing
- Hazard insurance
Don’t assume the deal is sealed
During escrow, a buyer is still free to completely back out of a deal. This may happen if they decide there’s an issue with the property or certain conditions of the agreement have been broken.
An outside party is responsible for managing the account as a representative of both parties. You can consider an escrow account as an agreement made by two parties to have valuables managed by an outside party until all terms of the financial transaction are met.