In the context of real estate, what typically occurs during escrow?

During escrow, the primary function is to act as a neutral third party that manages the process of transferring property and ensuring the terms of the sale are met before the finalization of ownership. This often involves the disbursement of funds in accordance with the terms agreed upon in the purchase contract. During this period, necessary documents such as the deed and any other legal paperwork are also exchanged between the parties involved in the transaction.

This stage is crucial because it protects both the buyer and seller by ensuring that financial commitments and paperwork are properly handled before ownership officially changes hands. The funds may be held in escrow until all conditions of the purchase agreement are satisfied.

While property ownership does indeed transfer at the end of the escrow period, it is during escrow that financial and legal responsibilities are settled, making the exchange of funds and documents the most accurate description of what happens during this phase. Home inspections and negotiations, while essential steps in the real estate process, typically occur before the escrow period begins.