Many individuals who are interested in selling their home chose to do so without hiring a realtor. This may allow you to save money on real estate commissions, which could end up otherwise costing you thousands of dollars. However, if you sell your home without a realtor—or purchase a home without a realtor—it may end up requiring some adjustments to the process.
For example, realtors generally take care of holding earnest money for the home in an escrow account before a sale goes through. In for sale by owner, escrow money may be held by title companies or a real estate lawyer.
Title Companies May Hold Escrow Money for You
Escrow accounts are used to hold a buyer’s money in trust during the home buying process, according to Investopedia. If you are not working with a realtor, someone must be responsible for this money. Most buyers would not be comfortable allowing the seller to hold their funds, and, in fact, this may not be allowed through real estate law.
Instead, you may need to find a third-party to handle your escrow account. If you are not using a realtor, a title company may be able to hold the earnest money in an escrow account for you. Note that a title company may also be able to:
- Handle title work for your home
- Take care of closing documents for you
If you work with a title company to handle the paperwork on your for sale by owner transaction, they may not charge you a fee for escrow services. If you only use the title company to handle your escrow account, they may charge you a fee.
To consult with an experienced for sale by owner lawyer today
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You May Work With a Real Estate Lawyer for Escrow Services
Title companies are not your only option if you need to hold earnest money in escrow for a for sale by owner real estate transaction. You may also contact a real estate lawyer to get help in this situation. A lawyer may be able to place earnest money into a trust account until the sale of the property is completed.
You may be able to work with a real estate lawyer to handle all of your closing services. In this situation, the fees for handling earnest money are often included in a package deal. You may also be able to work with a lawyer to just handle escrow services for a separate fee.
Understanding the Purpose of an Escrow Account
Escrow accounts are used to hold earnest money during a real estate transaction. If you are not familiar with the term earnest money, it describes a portion of the down payment on a house, offered by the buyer to show that they are serious about purchasing a property.
Earnest money is set aside during the process of buying a home or business. Once you close on the property, the earnest money will be released back to the buyer, generally with the understanding that they will put it towards their down payment on the property.
Note that the earnest money will be returned to the buyer if the deal falls through because their offer was rejected.
Bogin, Munns & Munns May be Able to Help You
If you are looking for assistance purchasing or selling a home, a real estate lawyer who helps hold escrow money in for sale by owner transactions from Bogin, Munns & Munns may be able to assist you.
We offer a variety of services to homeowners selling their property. In addition to assistance holding escrow money, we can help you draft and review contracts and make sure your transaction is in compliance with local real estate laws. With a transaction as significant as a home purchase, a real estate lawyer can review all documents and decision making to help protect your assets. This may give you peace of mind, especially if the other party in your transaction has professional representation as well.
To learn more about these services or to begin working with a real estate lawyer today, call Bogin, Munns & Munns law firm at (855) 686-6752. A member of our team is standing by to discuss your needs.
We assist clients throughout Florida and have offices in Orlando, Clermont, Cocoa, Daytona, Gainesville, Kissimmee, Leesburg, Melbourne, Ocala, Orange City, St. Cloud, Titusville, and The Villages.
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