Many people who want to sell their house do it without using the services of a realtor. This may allow you to save money on real estate commissions, which can cost thousands of dollars otherwise. However, if you sell your property without using a broker or if you buy a home without using a realtor, you may need to make some changes to the procedure.
Realtors, for example, typically store earnest money for a home in an escrow account until the sale is completed. Escrow money may be retained by title companies or a real estate lawyer in a for sale by owner transaction.
According to Investopedia, escrow accounts are used to store a buyer’s money in trust during the house purchase process. Someone must be liable for this money if you are not dealing with a realtor. Most buyers would be uncomfortable allowing the seller to store their monies, and it’s possible that this is against the law.
Hire an Escrow Company Manage Your Transaction
You may need to hire a third-party to manage your escrow account instead. If you don’t want to use a realtor, a title company might be able to keep your earnest money in an escrow account for you. It’s worth noting that a title company might be able to:
– Take care of your home’s title work.
– Take care of the closing paperwork for you.
If you use a title company to handle your for sale by owner transaction’s documentation, they may not charge you for escrow services. You may be charged a fee if you exclusively utilize the title agency to handle your escrow account.
What is an Escrow Account and What Does It Do?
During a real estate transaction, escrow accounts are utilized to hold earnest money. If you’re not familiar with the term “earnest money,” it refers to a portion of a buyer’s down payment that they contribute to indicate that they’re serious about buying a home.
During the process of purchasing a property or business, earnest money is set aside. When you close on the property, the earnest money is returned to the buyer, usually with the understanding that they will use it to put toward their down payment. If the agreement falls through because the buyer’s bid was refused, the earnest money will be returned to them.
We provide a number of services to homeowners who are selling their home. We can help you design and evaluate contracts, as well as ensure that your transaction is compliant with local real estate rules, in addition to holding escrow money. Contact us now to request more information.
