Real estate deals in Indiana involve more than signing papers and shaking hands. One key part of the process is escrow. You need to understand how escrow works so you can protect your money and keep the sale on track.
Escrow’s role in Indiana real estate
Escrow creates a neutral space where a third party holds money and documents until both sides meet the contract’s terms. In Indiana, escrow usually involves earnest money—the deposit that shows you’re serious about buying. The escrow agent safeguards that money until closing day.
You’ll often work with an attorney, a title company, or a licensed real estate broker to handle escrow. Indiana law requires the agent to deposit escrow funds into a separate account. These funds must stay separate from any business or personal money. This rule prevents mismanagement and gives you peace of mind during the transaction.
Who manages the escrow account?
Title companies or the seller’s real estate broker typically manage escrow accounts in Indiana. The escrow agent follows state rules on handling and tracking funds. When both parties complete all contract conditions—like inspections, mortgage approval, and title review—the agent releases the funds, and the closing proceeds.
The escrow holder also ensures that the transaction covers taxes, insurance, and outstanding liens. By confirming these details, the agent helps both sides avoid legal issues after the deal closes.
Mistakes buyers and sellers must avoid
Buyers often forget to check where their earnest money goes. You should verify the escrow account and ask for proof of deposit. Sellers need to make sure they choose an agent who complies with Indiana’s escrow laws. Ignoring this step can lead to serious conflicts.
Ambiguous contract terms can also create trouble. Write clear instructions about how the escrow agent should handle funds, especially if the sale falls through.
Escrow protects everyone in the deal. When you follow Indiana’s rules and choose a qualified agent, you reduce risk and close the deal with confidence.
