Escrow companies | Selling Your House Fast
Here’s a scenario. When you were a kid you wanted to trade something your mom packed you for lunch with a something a classmate’s mom packed them for lunch. You both agreed to the trade. The exchange was about to happen. Then there was that uncertain moment in the trade when you and your classmate had to do the exchange. Were you going to give them your dessert for their potato chips and they would take your dessert and withhold their chips from you? Or vice-versa? What if that trade required special circumstances? They could have the dessert for the chips but they had to give back the plastic container the dessert came in. Who would over see that the special circumstances were dealt with as agreed? It’s a very stressful situation.
That scenario could have been guaranteed to go smoothly if that lunch had an escrow office in it! You and your classmate would reach your agreement of exchanging your dessert for their bag of chips. You both would have gone to the escrow office but the cool kids table and asked to see the escrow officer. You would have explained your agreement to EO (escrow officer). Then the EO would take you dessert and your classmates bag of chips. The EO would declare that he/she was in possession of both and they were in good condition. The EO would then tell your classmate that according to the contract as soon as the dessert was eaten the classmate was required by contract to return the plastic container the dessert came in back to you.
Of course this is an elementary example (pun intended) of how escrow works. But it illustrates how using an escrow company takes the stress out of doing a transaction with a stranger when the stakes are high. And when you’re in elementary school trading at lunch time can be very high stakes! So when you want to sell or buy a house the escrow company is a neutral 3rd party that holds and distributes funds and legal documents on behalf of buyer and seller in the real estate transaction.