Whenever you are buying or selling property, it’s important to protect your investment. In the vast majority of real estate transactions, a contract is signed with the intentions of executing it at some point in the future. Each side wants to make sure that the other party is acting in good faith financially speaking.
Therefore, in a contractual arrangement, the best way to safeguard money is to set up an escrow account. Generally speaking, this account, managed by a neutral third party (the escrow holder), will contain all of the funds necessary to complete the transaction — at a time in the future. The account is set up in a fashion that will allow the funds to be transferred at the time of the closing of the transfership of ownership of the property.
In addition to the buyer’s down payment on the property, the escrow should also include the deed from the seller and any other documents pertaining to the transfer of the property.
According to Joel R. Spivack, Esq., it’s important to have an escrow account as part of any real estate transaction because both parties can be assured that nothing will change hands unless all conditions listed in the contract are met. If, for example, you are the seller of a property, you wouldn’t want to hand over the deed to your house until the buyer has the total amount of money (in mortgage, etc.) ready to exchange at closing. If the mortgage falls through, the neutral third party retains possession of the deed until the financial issues can be sorted through and the deal is completed.
“I represent both buyers and sellers in real estate transactions in Cherry Hill and throughout Southern New Jersey,” said Mr. Spivack. “I take my responsibility in protecting my clients’ interests extremely seriously. Escrow is only one way we can safeguard a buyer or seller’s investment. As a longtime real estate attorney, I look at the big picture, making sure clients are fully protected at every step in the process.”
For more information about Mr. Spivack’s legal real estate practice, contact our offices for a free consultation.