Do you know what an escrow account is?
Deposit accounts or escrow accounts are a type of account that is used to receive the initial deposit or “good faith deposit” of a transaction and is made through a title company or the attorney in charge of the process. In other words, the money does not go directly to the seller, but rather it is safeguarded impartially until the end of the purchase. The deposit is made to formalize the commitment to purchase the property, this is represented as a sign of good intention under the parameters and regulations established by law. Usually, the amount of the deposit ranges from 5% to 10% of the purchase value, depending on what is agreed between the parties involved in the process of buying and selling a property.
When is the good faith deposit paid?
The good faith deposit is canceled depending on what is established in the contract, it will stipulate how many days the buyer will have to make this deposit and any other type of conditions that the buyer must meet. They are usually made the day after an offer is signed by the buyer and seller (executed offer). After the seller accepts the offer, the deposit will not be returned unless one of the clauses of the contract is not fulfilled. Escrow deposit funds are used at the end of the transaction in favor of the buyer.
If you need help when executing a real estate transaction, do not hesitate to contact an expert team of real estate professionals, in this way you will take care of your back and your transaction will be carried out without any setbacks or problems.