What is Escrow?

Escrow is also called closing or settlement. That’s when you sell or purchase a house or piece of property. 

Usually, closing happens in a title and escrow company's office, but can also be done remotely with different options depending on the situation. Both the buyer and seller will complete all related paperwork with the help of an escrow team. You’ll work together to finalize the agreement between the buyer and seller.

All financial to-dos, including closing costs, are settled during the escrow process. The title then transfers from the seller to the buyer. Finally, official documents are prepared, signed, and filed with local authorities. (Whew!)

What are Closing Costs?

Closing costs are all the costs that must be paid to close a real estate transaction. They can include, but aren’t limited to:

  • Title insurance
  • Property taxes
  • Real estate agent’s fees
  • Down payment balance
  • Primary mortgage insurance (PMI)
  • Attorney’s fees
  • Points
  • Surveying fees

Before closing, review your final closing statement or HUD-1 statement to ensure all the calculations are correct. For example, you’ll want to make sure you’ve been given all the credit for deposits and other buyer and seller credits you’ve agreed on. Don’t forget to double-check lender, title, and escrow fees for accuracy.

The Escrow Process

During the escrow process, a neutral third party (known as an escrow officer) will be present. The escrow officer holds and disburses the parties’ funds, as well as preparing documents for the transfer. They follow written instructions aligned with purchase terms and the sale agreement. 

Your real estate agent should ensure the purchase and sale (P&S) agreement is filled out as completely as possible. For example, all property that’s included in the sale should be clearly stated, along with the sale price, buyers’ and sellers’ addresses, phone numbers, special instructions, addendums, and other relevant information. 

A complete P&S agreement will expedite closing for everyone. Otherwise, the escrow officer may have to track people down to gather critical information, which stalls the process. 

During the Closing Process, Escrow Teams:


Review the P&S agreement and title commitment to ensure information complies with closing requirements.


Order payoffs on outstanding mortgages, contracts, liens, or other debts delaying title clearance.


Send opening letters to buyer and seller requesting related permissions, in addition to any information not disclosed by the P&S agreement (such as underlying encumbrances).


Wait on the lender to deliver the loan package.


Review loan packages, prepare final statements and escrow instructions, and transfer closing documents per the title report and P&S agreement.


Schedule final signing appointments with buyer and seller.


Buyer’s closing funds are deposited during this time. (Funds are deposited with escrow in the form of a cashier’s check drawn on a preferred Washington state bank or wire transfer. Due to Washington state’s Collected Funds Law, a cashier’s check must be deposited with escrow 24 hours before disbursement.


Escrow closer requests loan funds from the lender, usually in the form of a wire transfer.


Upon lender approval, the deed and deed of trust (mortgage) are delivered to the title company for the county auditor to record. 


Closer receives verification of recording, then closes the transaction. Receipt of the lender’s funds into the escrow account is confirmed. Escrow funds are then disbursed in accordance with all parties’ instructions.


Funding team notifies real estate agents, followed by the seller and buyer, that the transaction is closed. Alternatively, real estate agents may notify their clients.

We go the extra mile to help people achieve the fruitful dream of owning a home–their moment of peace in the shade.