When the sale of a house is in escrow, it means that the potential buyer of the home has deposited the payment amount for the home into a third-party deposit account, whose funds are to be delivered to the seller upon the completion of certain predetermined conditions. The average amount of time required to complete the escrow process is between 30 and 45 days, according to mortgage broker Susie Schevill. A short escrow can be completed in a much shorter time.
Lender and Buyer
A buyer should be pre-approved by his lender to reduce the amount of time it takes to receive approval for the mortgage loan. Likewise, to ensure a speedy process, the lender should be familiar with the area and any specific issues and resources. If a nontraditional loan, such as a Department of Housing and Urban Development (HUD) or Department of Veterans Affairs (VA) loan, is being sought, a short escrow may not be possible, because such loans usually require 30 days or more. A lender must be committed to closing on time to complete a short escrow.
Before a short escrow can be completed, the home needs to be appraised, inspected and, in some cases, repaired if the lender requires those actions for mortgage approval. Potability tests, or those that evaluate a home's water supply, can take a few weeks to complete. If repairs need to be made, a contractor must bid, complete and finalize all work within the short escrow period, which may be difficult to do depending on the required repairs.
Completing a short escrow requires planning, preparation and cooperation from all parties involved. A short escrow should not be attempted without careful consideration, and many real estate brokers try to discourage home owner's from hastily accepting such offers. If the conditions of a short escrow are met in the necessary time frame, the escrow is complete and the home transferred to the buyer. To find out more about escrow proceedings you should contact a mortgage lender.