Dissecting The Escrow Process For Michigan Real Estate

The Escrow Process

Buying or selling real estate involves a fairly complex and lengthy process with lots of confusing terms and technical jargon. Still, most people understand it all fairly well . . . till it comes to the escrow process. So let’s dissect the escrow process for Michigan real estate to make it a little less confusing

The Actual Escrow Process

Once a purchase offer has been made and has been accepted by both seller and buyer, the transaction then moves into what is known as “escrow.” At this point, a third party usually steps in to oversee the rest of the necessary steps to complete the sale. These steps include disclosures, title search, inspections, and more and can take from several weeks to a couple of months. Once the escrow process is completed, the seller gets the money and the buyer gets the keys.

Here’s how the lengthy escrow process usually goes:

  1. An escrow agent receives the purchase/sale agreement and sends instructions to the buyer and seller.
  2. After receipt of the preliminary title, the escrow agent will mail it to both parties and begin clearing liens, mortgages, and other encumbrances.
  3. The escrow agent prepares the remaining documents needed to close the sale, including warranty deed and tax documents.
  4. Typically, the escrow agent receives loan documents from the buyer’s lender four days before closing.
  5. The agent will prepare a settlement statement to be signed by buyer and seller.
  6. Buyer and seller then sign all the closing documents.
  7. The loan documents are sent from the escrow agent to the lender for review, and the agent will send the deed to the title company.
  8. After the lender approves the documents, the escrow agent grants permission for the title company to record them.
  9. The escrow agent receives the funds via a wire transfer, as well as a recording number from the title company signifying that the closing has been completed.
  10. The escrow agent then disburses the funds and sends a final settlement statement to all parties.

What You Really Need to Know

So, the escrow process for Michigan real estate is indeed a lengthy and dizzying process. Actually,  though, there are only a few things you really need to know about all this, and they are:


The title company’s job is simply to make sure the title is clear of all encumbrances, such as liens and judgments, that might have to be cleared away before a sale can take place. Basically, it’s the title company’s job to ensure that the seller actually does own the property and that the property can actually be sold without any financial or legal issues. When the title company determines that the title is clear, they will issue a title insurance policy to protect the buyer and lender from any future disputes about the property.


Escrow services exist to make sure everything is done properly and legally and in conformity with the established process. They provide a neutral third-party agent or officer to take care of and oversee the title and escrow work, the financing, the actual transaction, and the important paperwork – all the interlocking parts in a real estate purchase/sale or any other title transfer. Basically, the escrow agent/officer safeguards the documents and makes sure everything is done in a timely fashion.


Since the escrow agent stands between you and the purchase or sale of a home, you need to find a good one. You should start by asking your real estate agent for a recommendation or referral, and ask friends and family members who have been involved in a fairly recent real estate deal. And do be sure and seek out a referral for an individual agent, one who has experience in the kind of home you’re buying.


A lot of people aren’t aware that they can shop for an escrow service and that they don’t have to use the one suggested by the lender. The fees vary, so it is a good idea to do some shopping.

Your Agent Can Help

As you can see, then, the escrow process is an important part of real estate transactions in Michigan. And while it may be complex and drawn out, the escrow process really is there for your protection. But things can and do go wrong, so talk to your agent before selecting an escrow service. To find out how we can help, call us today! 248-330-4421

Want to learn more about the escrow process when buying or selling a house in Metro Detroit Michigan? Contact us today, we are here to help! 248-330-4421

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