Closing on a home is a multi-party process that typically takes place over 4 to 6 weeks. During this time, you'll need to conduct inspections and secure a mortgage to finance your home purchase. In order to protect all parties involved, an earnest deposit and all paperwork will be placed in a third-party escrow account, which will prevent funds or documents from changing hands until the deal is complete. Escrow plays an important part in the closing process, and our real estate agents can help you understand why.

• What Is Escrow?
  Escrow is a third party that prevents funds, titles, and documents from exchanging hands during the closing process in order to protect all parties involved with the transaction. Escrow can refer to a bank account that holds funds or a professional service that maintains documents. Escrow services usually cost about 1% of the home's purchase price and are typically covered by the buyer.
  
  Escrow is also an important part of your monthly mortgage payment. Depending on your lender, you'll likely be required to pay your homeowner's insurance premiums and property taxes out of an escrow account that must be initially funded at closing.
  
  
• The Importance Of An Earnest Deposit
  When making an offer on one of these Cleveland homes for sale, you'll need to specify an earnest money deposit. This "good faith" deposit is a portion of your down payment placed in a third-party escrow account immediately following the acceptance of your offer. These funds are placed in an escrow account and only released to the seller in the event you breach the contract by backing out on the home purchase. Most buyers offer between 1% and 5% of the home's sale price as an earnest deposit.
  
  
• What Are The Benefits of Escrow?
  Escrow protects both buyers and sellers. As a buyer, you'll likely outline a number of contingencies in your offer. Paying a deposit into an escrow account helps to ensure the seller doesn't receive the funds until all requirements are met. Because sellers remove their listing from the market during the closing process, escrow protects them in the event you back out of the deal for a reason not specified in the contract.

Escrow plays an important role in the closing process and the calculation of your monthly mortgage payment. For more information on buying your first home, contact us today.