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Escrow Accounts At Closing
Question: How are escrow accounts used at closing?
Answer: It sometimes happens that not all agreed promises found in a sale agreement can be fulfilled by closing. For instance, if closing takes place in January in a cold climate it may not be possible to test the air conditioning system. How does the buyer know the system works? It is best to wait until warmer weather to test the system. But, what if something is wrong with the system? To resolve buyer concerns, an "escrow" account can be created at closing. In this situation, money from the seller is held in reserve to pay for needed repairs as defined in the escrow agreement. If repairs are not required, or if the cost is less than the amount of money set aside, the difference is returned to the sellers.
Written by Peter G. Miller.
© 1997 Peter G. Miller. All Rights Reserved. Rules, Disclaimers & Notices.
Copyright © 2012 Realty Times. All Rights Reserved.
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