Everything You Need to Know About an Escrow Account When Buying or Selling a Home in Northern Virginia

Escrow accounts are a critical part of protecting both a buyer and a seller in a real estate transaction. However, most people don't think twice about how or why an escrow account is so important. 

Here is our guide to everything you need to know about an escrow account when buying or selling in Northern Virginia. 

What Is an Escrow Account?

An escrow account is managed by a title and escrow company to make sure that the commitments that are made during the buying or selling process in real estate are followed through by a transaction coordinator. 

The account insures that both parties in a transaction are protected from large monetary losses. 

How Does an Escrow Account Work When Buying or Selling a Home? 

An escrow account is primarily used to put earnest money down on a house, to purchase a home, and in the case of a rent back to handle any deposit or other money owed. 

In all cases, the account and money in the account cannot be transferred without meeting certain criteria in the transaction process. 

Thus, an escrow account protects the investment of both the buyer and seller. 

How Much Does an Escrow Account Cost? 

Typically the fees are bundled into your closing costs and represent about 1 to 2 percent of the transaction. 

However,  many people are left wondering what the title and escrow company did to earn that money,  especially if there was little to no communication. 

How Long Do You Have an Escrow Account? 

Even after buying a home, your escrow account is used by your lending company to pay taxes on the house as well as other expenses, such as homeowner's insurance. 

Therefore, your relationship with the title and escrow company is a long term relationship that lasts with the lifetime of your house. 

Top Escrow Company in Northern Virginia

Many times homeowners don't think about the title and escrow process as a long term relationship.  

If you don't hear from your title and escrow company during your purchase of a home, then you may worry about how well they will treat you once you own a home. 

At Allied Title and Escrow, we pride ourselves on proactive communication during the home buying or selling process, as well as for the lifetime of your escrow account.