Escrow banishes the ghost of transaction past

Dated: September 5 2021

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The length of time an escrow lasts is usually determined by the requirements of the mortgage funding process—a good loan officer can get everything done in 30 days, while others might require 45. But there are more reasons for an escrow period than simply completing a loan. One often-overlooked purpose is to make sure that sellers and buyers fully commit to their changed relationship with the property changing hands. Unless one is buying a brand-new home from the original builder, there are no guarantees against needing to repair or replace some part of a home’s equipment. If purchasing a house involved nothing more than writing a check and moving in, many buyers might balk at having to pay for plumbing work or to replace an air conditioner. They’d say that the seller unfairly misrepresented the condition of the property. Then they would send demanding letters and threaten a lawsuit.

That’s why the multiple disclosures that sellers and buyers are asked to sign are so important, and why it’s critical for buyers to pay for independent inspections of the property. Before they become owners, they need to consider everything that might be a problem about the property and negotiate with the sellers to reach an agreement about which side should take responsibility for things that need fixing. That process is what leads buyers to assume full ownership of responsibility for the property—not just the privilege of using it.

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DAVID DUNLAP

As a residential real estate executive with an extensive background in corporate marketing, I am able to apply unusually strong skills in marketing communications, e-marketing, strategic planning and ....

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