Escrow: Now What?

Congratulations, your offer was accepted! In some states this stretch is called “escrow.” Here in Minnesota, you’ll usually hear that the home is “under contract” or “pending,” and a title company handles the closing. Whatever you call it, here’s what happens between now and the day you get your keys.

Earnest money

Your purchase agreement says how much earnest money you’ll put down and when. It’s usually held in a trust account until closing, then credited toward your purchase. If the deal falls apart, what happens to that money depends on the terms of your purchase agreement, so read those sections carefully and ask us about anything that isn’t clear. For legal questions, talk with a Minnesota real estate attorney.

Your down payment

Your down payment is separate from earnest money and is due at closing. How much you put down depends on your loan. A bigger down payment means a smaller loan and a lower monthly payment. Your lender can show you the trade-offs.

Your to-do list while you’re under contract

1. Inspections. Schedule them right away. Your inspection contingency has a deadline, and if the inspection turns up something serious, you’ll want time to ask for repairs, renegotiate or, if your agreement allows, cancel. Many Minnesota buyers add a radon test, and homes with a private well or septic system often get those checked too.
2. Financing. Finish your loan application and send your lender anything they ask for quickly. Expect an appraisal. If your financing contingency deadline is coming up and the loan isn’t final, talk to us before it passes so you understand your options.
3. Title. The title company searches the property records and sends a title commitment. The goal is a clean title, meaning no surprise liens or claims against the property. We’ll help you review it, and you can ask about an owner’s title insurance policy.
4. Homeowners insurance. Your lender will need proof of coverage before closing. Shop for a policy early so you’re not scrambling the last week.
5. Utilities. Call the electric, gas, water, trash and internet providers to set up service in your name starting on closing day.
6. Closing Disclosure. Your lender must give you the Closing Disclosure at least 3 business days before closing. Compare it with your Loan Estimate and ask questions.
7. Wiring money safely. Before you send funds, call the title company at a number you already know is real to confirm the wiring instructions. Never trust instructions that arrive only by email.
8. Final walk-through. Shortly before closing, walk the home again. Check that agreed repairs are done, that items included in the sale are still there, and that nothing has changed since you last saw it.

Then you sign, get the keys, and it’s yours. Want the full list in one place? Print our contract-to-closing checklist.