What typically occurs during the escrow process?

During the escrow process, funds and documents are indeed held by a neutral third party until specific conditions of the sale are met. This is a critical function of escrow, as it ensures that both the buyer and seller are protected during the transaction. The neutral third party, often an escrow officer or company, manages the exchange of money and legal documents, such as the deed and loan documents, ensuring that neither party has access to these items until all terms of the agreement are fulfilled.

This process helps prevent potential disputes and misunderstandings since the escrow holder acts as a mediator, ensuring that both parties meet their obligations — such as inspections, financing contingencies, and repairs — before the transaction is completed. Only after all conditions are satisfied will the funds be released to the seller, and the property title be transferred to the buyer. This fosters trust and transparency in real estate transactions.

While the other options may be components of a real estate transaction, they do not specifically pertain to the escrow process itself. For instance, repairs by the seller may occur prior to closing, inspections are typically conducted earlier in the buying process, and negotiations regarding the sale price are finalized well before the escrow phase begins. These stages focus on different aspects of the overall transaction rather than the