What Is Escrow?
Escrow is a neutral and essential part of the real estate transaction process in Washington State. After a buyer and seller reach agreement on the terms of a property sale, those terms are delivered to a third party known as the escrow holder. The escrow holder acts as an impartial facilitator whose responsibility is to follow the written instructions of all parties involved and ensure that every condition of the transaction is properly completed before funds and ownership are transferred.
Escrow functions as a secure holding process for money, documents, and legal instruments. It protects both buyer and seller by ensuring that no one party is exposed to unnecessary risk while the transaction moves toward closing.
Why Is Escrow Needed?
Real estate transactions involve significant financial commitments, legal documentation, and strict timelines. Escrow provides assurance that no funds or property will change hands until all agreed upon conditions have been met. This includes inspections, financing approval, title review, and any negotiated repairs or contingencies.
Given the complexity of today’s real estate transactions, escrow is overseen by trained professionals who coordinate documentation, confirm compliance with the purchase agreement, and work closely with lenders, title companies, and real estate brokers. This structure creates clarity, accountability, and peace of mind for everyone involved.
How Long Does Escrow Last?
The length of escrow is determined by the purchase and sale agreement and the joint escrow instructions agreed to by the buyer and seller. Escrow timelines can range from a few days to several months depending on the circumstances of the transaction.
In the Seattle residential market, escrow typically lasts between thirty and forty five days. Factors such as financing type, inspections, appraisal timelines, and negotiated contingencies can all influence the overall length of escrow.
Who Chooses the Escrow Company?
The escrow holder is selected by mutual agreement between the buyer and the seller. When a real estate broker is involved, they may recommend an escrow company based on experience, reliability, and familiarity with local Seattle practices and regulations. In many cases, the seller has already opened escrow when the home is listed through the NWMLS. Unless the buyer has a strong objection, the buyer and seller typically proceed with the seller’s chosen escrow company when the purchase and sale agreement is submitted.
While recommendations are often made to help ensure a smooth transaction, the final decision always rests with the principals to the transaction.
