Escrow is a term used often in the financial world. When it comes to mortgages, escrow or being in escrow means that you are using money as a way to “hold” or secure your offer in place when going through the home buying process. Another term for escrow money is earnest money. Depending on what your real estate contract says, you will have either put down earnest money or escrow money to help secure your offer.
Typically, closing on a home can take anywhere from 19-30 business days depending on the lender you choose. If you put down escrow money or earnest money when you sign your real estate contract, you are in escrow until your loan funds and you close on your new home.
Escrow money can work like a deposit and go towards your closing costs and fees when you close. Again, this will just depend on your purchase contract. In some cases, you as the seller can make your escrow money non-refundable if you back out as a way to show you are serious about buying the home.