All about escrow services

When you're dealing with a huge transaction, either is a buyer or seller a lender or a lendee, the deal can be very risky. Escrow is one of the best ways to reduce risk in such transactions. Whether you'd like to use an online escrow service to sell or buy real estate, a car, merchandise or do any other kind of transaction, first you need to know all about escrow services.

What is Escrow?

The escrow meaning today is a bond, money, deed or any other kind of document controlled by a third party and taking effect when the specified conditions are fulfilled. Escrow means using a third party to hold onto something of a given value until all the details of the stipulated transactions are complete and both parties are satisfied with it.

An escrow agent is there that party that remains neutral during the transaction and they only release the escrow deposit once they ensure all parties involved fulfill the escrow agreement. Here is all about escrow services, and how it works.

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How Escrow Works

Both buyer and seller agree to terms

Both split the escrow fees between them and pay the agent

The buyer deposits the escrow funds or documents

The seller ships the products

The buyer inspects and accepts the products

The escrow company releases the funds or documents to the seller

If the buyer is unsatisfied with the products, they ship them back to the seller, the seller verifies the products have been returned, and the escrow company releases the funds back to the buyer.

Escrow Transaction Example

Let's say you found a beautiful car on cheki.com, but it is fairly expensive at $5,000. You can't just send such a huge amount of money to a stranger and hope they deliver the car. What you do is register and account with a legitimate escrow service such as EscrowKenya and agree with the seller on terms of the transaction. You then send the money to the escrow account, together with the account fees. The escrow agent will notify the seller of your deposit and they will ship the car. Once you receive the car, you will have several days to check it, and at your approval, the escrow service will send the money to the seller.

What Happens During Escrow Disagreements?

Most escrow services run smoothly but sometimes there is a disagreement or two. When this happens, the escrow company decides what should happen using the outlines of the terms stipulated by the parties in the agreement. The escrow agent decides who is at fault and whether or not the sale should be completed.

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How Long Does The Escrow Period Last?

The escrow period depends on both parties and how long they hold their end of the deal. The sooner the buyer deposits the funds or documents to the escrow account, the sooner the seller releases the merchandise, and the sooner they get paid. There are certain contingencies that need to be met in the purchase agreement depending on what is being sold.

For instance, if the seller is selling a home, then the buyer needs to do a home inspection, an appraisal, and deal with title issues before the final payment can be sent to the seller. If the seller is selling a car, the buyer must do a test drive and inspect that everything is as it was described before releasing the payment, the same applies for products because the buyer must inspect and ensure they got everything they ordered before the funds are released to the seller.

Bottom line

This is all about escrow services you need to know in order to do a safe transaction. If you constantly sell good on platforms such as Facebook marketplace where you deal with people you don’t know, a trustworthy escrow account such as EscrowKenya will help you a great deal, and prevent you from being conned.