Real estate transactions can be intimidating to tackle on your own. That’s why it’s a good idea to have a real estate attorney who can assist with many things, including contract review and drafting, negotiations during closings, foreclosures, rental agreements, and ensuring deals are in your best interest.
When you are buying or selling a property, escrow accounts are another topic you may need to look into. While you can call your bank and ask them to open an escrow account for you, it can be intimidating to set up on your own, especially if you are unsure if you need one.
If you are interested in setting up an escrow account for a real estate transaction but don’t know where to start, having a real estate attorney by your side is a good idea. In fact, a real estate attorney can assist you by opening up an escrow account on your behalf and tackling any issues you might have involving escrow accounts. The experts at stoner-law.com recommend hiring attorneys who are knowledgeable about all processes and requirements related to escrow accounts.
What Is An Escrow Account?
An escrow account is, in the simplest terms, an account designed to temporarily hold funds for safekeeping. While you may be wondering if you can earn more in a high-yield savings account, you should assess the numbers to decide if setting up an escrow account is the right choice for you. With low-interest rates, an escrow account can be a better financial decision.
The provider of the escrow account should be a disinterested third party with no opinion on where the funds end up – in the case of a real estate transaction, the provider should not favor the buyer or the seller.
Utilizing Escrow Accounts
Escrow accounts are useful for potential homeowners as well as current homeowners. Most people first encounter escrow accounts during real estate transactions such as buying or selling a home. When buying a home, an escrow account can hold a money deposit to protect both involved parties.
If you want to make an offer on a house without giving a money deposit directly to the seller, you can make earnest money checks payable to an escrow account instead. This way, you know you’ll get your money back if there are any problems – whether you’re the buyer or the seller.
It can also be used by homeowners to collect monthly deposits to smooth out larger annual expenses, as well. Annual expenses such as homeowners’ insurance and property taxes are annual bills best broken down into manageable monthly payments, making an escrow account a great way to save up money for annual payments.
If you are a renter or landlord, escrow accounts are a great way to protect the interests of both involved parties as well as settle disputes. From security deposits to holding monthly rent payments during disputes, setting up escrow accounts is necessary for multiple circumstances. Because the account provider is a disinterested third party, escrow serves as a mediator for all real estate transactions, from renting to buying goods and services.
Setting up an escrow account can protect you during real estate transactions, and a real estate attorney can be there for you each step of the way.
