Buying or selling a home is a big deal, and with that comes a lot of moving parts. One of the most important—and often misunderstood—pieces of the puzzle is escrow. If you’ve ever heard the term and wondered what it really means, you’re not alone. Let’s break it down so you feel confident navigating this critical phase of a real estate transaction.
What Is Escrow?
Escrow refers to a neutral third-party process that holds funds and documents until certain conditions are met in a real estate transaction. Think of escrow like a safety deposit box, but for your entire home purchase process.
It’s a way to make sure that everyone holds up their end of the deal—the buyer, the seller, and even the lender. Once all agreed-upon conditions are satisfied (like inspections, financing, and title clearance), the escrow closes and the deal becomes official.
Why Do We Use Escrow?
Escrow exists to protect both parties:
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For buyers, it ensures their money isn’t handed over until they’re getting what they paid for.
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For sellers, it guarantees they won’t transfer ownership until the buyer has met all contractual obligations.
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For lenders, it provides assurance that the transaction is proceeding with verified steps in place.
In short, escrow builds trust into what is, for most people, the biggest financial transaction of their lives.
What Happens During Escrow?
Once you go under contract, the escrow period officially begins. Here’s a simplified timeline of what typically happens:
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Opening Escrow: A title company or escrow company receives the signed purchase agreement and opens the escrow file.
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Earnest Money Deposit: The buyer deposits earnest money, which is held in the escrow account.
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Inspections & Disclosures: The buyer conducts home inspections, and the seller provides property disclosures.
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Appraisal: If the buyer is financing the purchase, the lender will order an appraisal to confirm the home’s value.
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Title Search: The title company conducts a title search to ensure there are no legal issues (liens, claims, or disputes).
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Loan Approval: The lender processes the buyer's mortgage and issues final loan approval.
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Final Walkthrough: The buyer does a last check to make sure the property is in agreed-upon condition.
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Signings & Closing Disclosure: Both parties sign documents, and the buyer receives a Closing Disclosure at least 3 days before closing.
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Closing: The funds are transferred, and the deed is recorded. The buyer officially becomes the new homeowner.
How Long Does Escrow Take?
In Utah, the typical escrow period lasts 30 to 45 days, but it can vary based on financing, inspections, and other negotiations. All timelines are spelled out in the purchase agreement, so it’s important to work closely with your Realtor to stay on schedule.
Common Escrow Terms to Know
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Earnest Money: A deposit that shows the buyer is serious—it’s held in escrow until closing.
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Contingencies: Conditions that must be met for the deal to move forward (like financing or inspection).
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Title Insurance: Protects against future claims to the property.
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Closing Costs: Fees paid at the end of the escrow period, typically 2–5% of the home price.
Why It Matters
Understanding escrow gives you more confidence during your transaction. It’s one of the few times in life where tens or hundreds of thousands of dollars change hands—you want to know where that money is, and why.
Whether you’re buying your first home or selling your third, escrow plays a key role in keeping the transaction fair and secure.
Thinking about buying or selling in Utah? Let’s connect and talk through what your escrow process might look like. Whether it’s your first transaction or your fifth, I’ll help you understand every step of the journey.
