Buying or selling in Seattle or the Eastside and hearing “escrow” at every turn? It can feel like insider language at a moment when you want absolute clarity. You deserve a straightforward path from offer to keys. In this guide, you’ll learn exactly how escrow works in Washington, what to expect in King County, and how to keep your closing on track. Let’s dive in.
What escrow means in Washington
Escrow is a neutral third party that holds funds, documents, and instructions until every contract condition is met and the sale can close. In everyday conversation here, people often use “escrow” and “closing” to mean the same thing. In practice, a licensed escrow agent or a title company that offers escrow services coordinates the closing, records documents, and disburses funds.
That neutrality matters. The escrow holder protects both sides by following the written purchase agreement and any lender instructions before releasing money or recording documents.
Who runs escrow here
Several professionals play key roles, but each has a defined lane.
- Escrow companies: Independent, licensed escrow agents whose primary business is escrow.
- Title companies: Many provide both title insurance and escrow services.
- Lenders: Approve and fund loans, then wire proceeds to escrow, but do not act as the escrow agent.
- Real estate brokers: Help you select a reputable local escrow/title provider and name it in your contract.
In Washington, escrow agents are regulated by the Washington State Department of Financial Institutions. Title companies that provide escrow follow both insurance and escrow rules. You can ask your agent to confirm that your escrow holder is licensed in Washington and experienced with King County recording.
From offer to close: the escrow timeline
The purchase and sale agreement drives the sequence. Here is the typical flow from mutual acceptance to recording.
Mutual acceptance and opening escrow
Once both parties sign and acceptance is communicated, you have mutual acceptance. This is the contract’s effective date and it starts most deadlines. The named party opens escrow and delivers the signed agreement. Earnest money is delivered to escrow by the timeline in the contract, often within 1 to 3 business days.
Contingencies and due diligence
Common contingencies include inspection, financing, appraisal, title review, and any HOA document review. These periods are negotiated. Escrow tracks dates, holds funds, and waits for written instructions showing that each condition has been satisfied or waived.
Loan underwriting and document prep
Your lender works through final underwriting and issues a clear to close. Loan documents go to escrow for your signature once lender conditions are met.
Signing, funding, and verification
Buyers and sellers sign closing documents at the escrow office or remotely when permitted. The lender wires funds to escrow. Escrow confirms all required documents and funds are in, then schedules recording.
Recording and disbursement
The deed and, if applicable, your mortgage are recorded with King County. Recording is the official public notice of the transfer. After recording confirmation, escrow disburses seller proceeds and pays off liens, commissions, taxes, and agreed costs per the settlement statement.
How escrow handles money and documents
Escrow handles funds under strict trust accounting rules.
- Earnest money: Your deposit is placed into an escrow trust account and held until applied to closing or released per written instructions.
- Trust accounting: Client funds are kept separate from operating accounts and reconciled under state rules.
- Release of funds: Escrow releases money only after contract conditions are met and recording is confirmed. If there is a disagreement about who should receive funds, escrow will not release them until it receives joint written instructions or a court order.
- Settlement statements and disclosures: Escrow prepares a final statement of credits and debits, including prorations for taxes, HOA dues, utilities, commissions, and lien payoffs. If you have a loan, federal rules require your lender to deliver a Closing Disclosure at least three business days before consummation.
Typical Seattle and Eastside timelines
Every deal is unique, but these ranges reflect common practice in our area. Your contract deadlines control.
- Earnest money delivery: 1 to 3 business days after mutual acceptance.
- Inspection period: Often 5 to 10 calendar days. Specialized inspections may need more time.
- Loan contingency: Commonly 21 to 30 days for conventional loans. Timelines vary by lender and program.
- Appraisal: Typical turnaround is 7 to 21 days, depending on appraiser availability and market pace.
- Time to close: Cash can be as fast as 7 to 14 days if all parties are ready. Financed transactions often target 21 to 45 days, with 30 days a common goal.
- Recording in King County: Often same day or next business day once documents are in proper form with fees collected.
King County specifics to know
Understanding local customs helps you plan and avoid surprises.
- Recording: Deeds and mortgages are recorded with King County. Escrow coordinates document submission and recording fees.
- Real Estate Excise Tax (REET): Washington collects REET at closing. Rates can change and may include state and local components. The seller typically pays REET by local custom, but the contract governs final responsibility. Confirm current rates with the state or county.
- Closing cost customs: Sellers commonly pay broker commissions and REET. Buyers usually pay lender fees, their loan title policy, and escrow/title closing fees. Who pays the owner’s title policy varies by negotiation. Always defer to your purchase agreement.
How to keep your closing on track
A few proactive steps can reduce stress and delays.
- Confirm your escrow and title providers early and choose a local team familiar with King County recording.
- Deliver earnest money quickly and keep written proof of delivery.
- Schedule inspections immediately after mutual acceptance and order any HOA documents promptly.
- Work closely with your lender, respond fast to documentation requests, and monitor appraisal timing.
- Review your Closing Disclosure and settlement statement carefully and ask questions early.
- Protect your funds: call your escrow office at a publicly listed number to verify wire instructions before sending any money. Do not rely on email alone.
Common scenarios and how escrow responds
Here are situations that often come up, and what you can expect.
- A contingency is not satisfied: The contract controls. If a buyer has an inspection contingency and cancels within the period under the contract terms, escrow follows those instructions, including return or forfeiture of earnest money as directed.
- Early release of funds: Escrow generally will not release seller proceeds until lender funding is confirmed and recording is complete.
- Prorations: Taxes, HOA dues, and similar items are prorated as of closing per the contract and the local tax calendar.
- Title concerns after closing: A lender’s title policy is required for financed sales. Buyers who want protection for ownership claims should obtain an owner’s title policy to insure against covered pre‑closing defects.
Why a local advisor matters
Escrow is technical and timeline driven, and local practice in Seattle and the Eastside adds details that can influence outcomes. You deserve clear counsel, strong coordination, and experienced negotiation so you hit your dates and close with confidence. If you want boutique, relationship‑first guidance backed by decades of Eastside experience, our family team is here to help.
Ready to plan your next move in Seattle or on the Eastside? Connect with the team at Whittlesey Properties for discreet, expert representation.
FAQs
What does “mutual acceptance” mean in Washington purchase contracts?
- It is the date when both parties have signed the agreement and acceptance has been properly communicated, which starts most contractual deadlines.
Who chooses the escrow company in a Seattle-area sale?
- The purchase agreement names the escrow holder. Either party may propose a provider, and brokers commonly recommend reputable local escrow/title companies.
When does escrow release seller proceeds in King County?
- After the lender funds, documents record with the county, and all written conditions are satisfied. Escrow then disburses per the settlement statement.
Who typically pays Real Estate Excise Tax (REET) in Washington?
- The seller typically pays REET by local custom, but the purchase agreement controls and parties can negotiate responsibility.
How long does a financed home purchase usually take to close in Seattle?
- Many financed transactions target 21 to 45 days, with 30 days a common goal, depending on underwriting, appraisal timing, and contract terms.
How can I avoid wire fraud during closing?
- Verify wiring instructions by calling your escrow office at a number you obtain independently, and never rely only on emailed instructions.
