What Is Escrow? (And Why It Matters When Buying or Selling a Home)

“Escrow” is one of those real estate terms that gets thrown around a lot—but many buyers and sellers aren’t sure exactly what it means. If you're buying or selling in the Baton Rouge area, here’s what you need to know about escrow and how it protects everyone involved.

🔐 What Is Escrow?

Escrow is a neutral third-party process that holds money and documents on behalf of the buyer and seller until certain conditions are met.

Think of it as a safety vault for the transaction.

🔁 How Escrow Works in a Real Estate Transaction:

1. Earnest Money Deposit
   Once an offer is accepted, the buyer deposits money into escrow as a sign of good faith. This amount is typically 1%–3% of the home price.

2. Conditions Are Met
   While the home is “under contract,” the escrow agent (usually the title company or closing attorney in Louisiana) holds funds and coordinates:

   • Home inspections

   • Appraisal

   • Title search

   • Loan processing

3. Closing Day
   On closing day, the escrow agent disburses funds to the seller, records the deed, and transfers ownership.

🧾 Why Escrow Matters

• Protects the buyer’s deposit until all contingencies are satisfied

• Ensures clear title so the new owner has no legal claims against the property

• Provides a neutral party to hold funds and enforce the agreement terms

In Louisiana: Who Handles Escrow?

In most cases, a title company handles escrow and closing. We work with trusted, local partners to make sure your closing is smooth and secure.

📞 Have questions about the escrow process? Call Tracy Mathis at (225) 268-1110 or visit MovingTo225.com for a free homebuyer or seller consultation.