"Escrow disbursement is the release of funds from an escrow account to cover closing costs, agent commissions, or seller proceeds after all conditions are met. This process protects buyers and sellers, ensuring money only changes hands when all contractual obligations are met. Understanding escrow disbursement, whether you're a buyer with earnest money or a seller awaiting proceeds, prevents closing-day surprises."
"During a real estate transaction, your earnest money deposit and any other funds you provide for closing are held in escrow until all contract contingencies are fulfilled. Once the sale is finalized and recorded, those funds are disbursed to the appropriate parties, protecting you from paying before you legally own the home. Proper escrow disbursement ensures every dollar you contribute goes exactly where it should."
Escrow disbursement releases funds held in an escrow account to pay closing costs, agent commissions, title fees, and seller proceeds once all contractual conditions and contingencies are satisfied. Earnest money and other closing funds remain in escrow during the transaction to prevent premature payment before legal ownership transfers. After the sale is finalized and recorded, the escrow officer deducts required payments such as commissions and taxes and disburses remaining proceeds to the seller. Proper escrow disbursement protects buyers and sellers, ensures accurate allocation of funds, and helps prevent closing-day surprises by confirming obligations are met before money changes hands.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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