What Do Buyers and Sellers Do During Escrow?

Understanding What You Need to Do as a Buyer or Seller

While the escrow company is keeping things secure, the buyer and the seller still have jobs to do. Everyone has a part to play to make sure the deal goes through the right way.

So what exactly are you supposed to do during escrow? This guide will tell you what typically happens when you are in the escrow phase.

 

First, What Is Escrow Again?

An escrow officer or a settlement agent is hired to hold the important documents such as deeds, purchase agreements, loan documents, etc. These people serve as the middle ground or grey area where these documents are safe until the buyer gets the keys. Both sellers and buyers should hold up their end.

It starts when the purchase agreement is signed and ends when the sale is officially closed — when the deed changes hands, the money is transferred, and the buyer gets the keys.

Here is what each side is responsible for during that time.

 

The Seller’s Role in Escrow

If you’re selling your home, your job doesn’t end once the buyer agrees to the price. There are several key things you’ll need to do to help the sale move forward smoothly.

1. Follow Escrow Instructions

The escrow officer will provide a list of instructions and deadlines. These are legal steps that must be completed to close the sale. They might include signing specific documents, providing information about your mortgage (if you still owe one), and confirming how the final payment should be made to you.

It’s important to take these instructions seriously and handle them as soon as possible. Delays in paperwork can delay the closing of your home sale.

2. Provide the Deed

A deed is a legal document that proves you own the property. During escrow, you’ll work with your listing agent and the escrow officer to deliver the deed so it can be properly transferred to the buyer at closing.

This doesn’t mean you’re handing over ownership early — it just means the escrow officer holds onto it until everything else is complete. Once the buyer pays, the deed is recorded in their name.

3. Submit Required Documents and Disclosures

You may also be asked to provide several other pieces of information, such as:

• Proof of paid property taxes
   
• Homeowners insurance documents
   
• A copy of any home warranties (if you’ve offered one)
   
• Any needed inspection reports
   
• Receipts or disclosures related to repairs or improvements
   

These documents help the buyer feel confident about the purchase and help everyone stay on the same page. Your escrow officer and real estate agent will tell you exactly what’s needed.

4. Make Any Agreed-Upon Repairs

If you and the buyer agreed that you’d handle certain repairs before closing, those need to be completed during the escrow period. Be sure to save receipts and share them with your agent and the escrow team so everything is properly documented.

 

The Buyer’s Role in Escrow

As a buyer, you also have several responsibilities to keep things moving. Escrow is your chance to make sure everything about the home is in good shape, your loan is finalized, and you’re legally ready to become the new owner.

1. Submit the Earnest Money and Down Payment

One of the first things you’ll need to do is submit your earnest money — a deposit that shows the seller you’re serious about buying. This usually happens within a few days of the signed agreement.

Later in escrow, you’ll also need to submit your down payment and any additional funds your lender requires to finalize the sale. These must be paid in full before closing can happen.

2. Review and Approve Reports

This includes:

• Inspection reports: These help you understand the condition of the home — from the roof to the plumbing and more. If anything major comes up, you can negotiate repairs or decide to walk away if your contract allows.
   
• Preliminary title report: This shows who legally owns the property and whether there are any problems, like liens or unpaid taxes, that must be cleared before the sale.
   
• Appraisal: If you’re using a mortgage, your lender will order an appraisal to make sure the home is worth what you’re paying. If the appraisal comes in low, it could affect your loan approval — and you may need to renegotiate or bring more cash to the table.
   

You’ll need to sign off on these documents once you’re satisfied with what they show.

3. Secure Financing

If you’re getting a loan, this is the time when your mortgage lender will finish reviewing your application, order the appraisal, and ask for any final documents (like updated bank statements or tax returns).

You’ll also sign a Deed of Trust or Mortgage, which legally secures the loan and allows the lender to foreclose if you don’t make your payments. It sounds scary, but it’s just part of the normal loan process.

The sooner you respond to your lender’s requests, the smoother escrow will go.

4. Follow Escrow Instructions

Just like the seller, you’ll get a set of escrow instructions. These may include:

• Signing your final loan documents
   
• Choosing how you want to take ownership (individual, joint, etc.)
   
• Providing proof of homeowner’s insurance
   
• Scheduling your final walkthrough of the property
   
• Making sure all funds are in the escrow account by closing day
   

 

Working Together to Get to Closing

Escrow is a team effort. The buyer, the seller, the agents, the lender, and the escrow officer all have a part to play. In other words, whether you are in the position of the buyer or the seller, make sure to satisfy your end of the deal.

Delays often happen because someone didn’t sign something or missed a deadline. But when everyone does their part, escrow can move forward smoothly and even close ahead of schedule.