Understanding How Escrow Works in Washington Home Sales

Buying or selling a home in Bellevue and wondering what actually happens in escrow? You’re not alone. Escrow can feel like a black box when you’re juggling inspections, loan steps, and move‑out plans. In this guide, you’ll learn who does what, how the timeline works, what it costs, and what’s unique to King County so you can close with confidence. Let’s dive in.

Escrow basics in Washington

Escrow is a neutral third party that holds funds, manages documents, and coordinates closing. In Washington, an escrow company or the escrow division of a title company typically serves as the impartial facilitator.

Escrow is different from title insurance. Escrow handles money movement and signatures. The title company researches the property’s title, clears issues, and issues title insurance policies. Escrow agents in Washington are regulated and must follow written instructions from the parties.

Who does what in Bellevue closings

• Buyer

  • Provide the earnest money deposit.
  • Complete the loan application and supply lender documents.
  • Schedule inspections and negotiate repairs.
  • Sign final loan and closing documents and complete a final walk‑through.

• Seller

  • Deliver marketable title and required disclosures.
  • Pay off existing loans and any agreed concessions.
  • Sign the deed and transfer possession per the contract.

• Real estate agents

  • Negotiate terms and contingency deadlines.
  • Coordinate with escrow, title, and the lender.
  • Help review the title commitment and manage closing logistics.

• Escrow officer

  • Open escrow when the contract is signed and earnest money arrives.
  • Hold and disburse funds per written instructions.
  • Prepare settlement statements, coordinate signing, and arrange recording.

• Title company

  • Run the title search and issue the preliminary title report.
  • Recommend steps to clear liens or exceptions.
  • Issue the lender’s required title policy and optional owner’s policy.

• Lender

  • Underwrite the loan, order the appraisal, and clear conditions.
  • Provide a Loan Estimate early and a Closing Disclosure at least 3 business days before closing.

• King County Recorder

  • Record the deed and loan documents. Recording finalizes the transfer of ownership and makes it public.

Step‑by‑step escrow timeline

Here is a typical sequence in Bellevue and greater King County. Your dates may shift based on financing, contingencies, and property type.

1. Mutual acceptance, Day 0

   • Purchase and Sale Agreement is signed, and escrow is opened.
   • Buyer delivers earnest money, and escrow confirms receipt.

2. Open escrow and order title, Days 0–3

   • Title company issues the preliminary title report.
   • Escrow gathers contact details and shares an early closing estimate.

3. Contingencies and appraisal, Days 1–10 to 21+

   • Inspection windows are commonly 7–10 days, but shorter periods are common in competitive Bellevue situations.
   • Appraisal is usually ordered in the first 1–2 weeks and underwriting runs in parallel.

4. Title clearing, Days 3–through closing

   • Title identifies liens or issues, and escrow gathers payoff information.
   • Condo or HOA estoppel documents can take 7–10 business days.

5. Lender clear to close, about Days 14–40

   • Once conditions are met, the lender issues clear to close and coordinates funding.
   • Buyers must receive the Closing Disclosure at least 3 business days before consummation.

6. Final walk‑through and signing, just before closing

   • Buyers usually do a final walk‑through within 24 hours of closing.
   • Both parties sign closing documents at escrow or through approved e‑signing.

7. Funding, recording, and disbursement, closing day

   • Lender wires funds to escrow.
   • Escrow records the deed and loan with the King County Recorder, then disburses funds, pays off liens, and issues title policies.

Typical total timeframes:

• Financed sale: about 21–45 days, with many aiming for around 30 days.
• Jumbo or complex loans: often longer.
• Cash purchase: as fast as 7–14 days if title is clear and documents are ready.

King County specifics to know

• Title report and clearing: The preliminary title report lists exceptions, such as unpaid HOA assessments or tax liens. Escrow and title coordinate payoff and curative steps.
• HOA and condo estoppels: Bellevue has many condo and HOA communities. Budget 7–10 business days for association documents confirming assessments and rules.
• Recording: Your sale is official once the deed is recorded at the King County Recorder’s Office. Fees and processing times vary.
• Real Estate Excise Tax (REET): In Washington, sellers are typically responsible for REET. Rates and rules change, so confirm current details with state and county authorities.

What it costs and who pays

Every contract is negotiable, but here are common local practices.

• Typical seller costs

  • Real estate commission, negotiated in the listing agreement.
  • Real Estate Excise Tax.
  • Payoff of existing loans and related fees.
  • Any agreed credits or repairs.

• Typical buyer costs

  • Lender fees, plus the appraisal fee.
  • Lender’s title policy, with an optional owner’s policy available.
  • Escrow and recording fees, split or paid per the contract.
  • Prepaids, such as taxes, insurance, and interest.

• Prorations

  • Property taxes, HOA dues, utilities, and rent (if applicable) are usually prorated to the day of closing based on local billing cycles.

• Escrow and title fees

  • Fee structures vary by company. In the Puget Sound area, buyers and sellers commonly split escrow fees, but it depends on your agreement.

Common delays in Bellevue and how to avoid them

• Appraisal value issues. If the appraisal comes in low, it can trigger renegotiation or loan changes.
• Title problems. Unreleased liens or judgments require extra time to clear.
• HOA or condo estoppel delays. Order early, especially for high‑rise or large associations.
• Underwriting bottlenecks. Late documents or busy seasons can stall a file.
• Payoff statement errors. Incorrect mortgage payoff amounts can delay funding.
• Wire fraud risks. Always verify wiring instructions by phone using a known, trusted number.

Pro tips to stay on track:

• Order HOA and title items early.
• Send your lender documents promptly and keep communication tight.
• Ask escrow for a preliminary closing statement early.
• Verify all wiring instructions by phone before sending funds.

Key documents you will see

• Purchase and Sale Agreement.
• Earnest Money receipt.
• Preliminary Title Report or Title Commitment.
• Inspection reports and any repair addenda.
• Loan Estimate and appraisal report.
• Closing Disclosure, delivered at least 3 business days before closing.
• Settlement or Closing Statement from escrow.
• Recorded deed and loan documents after funding.

Quick checklists for buyers and sellers

• Buyer checklist

  • Apply for your loan and upload documents right after mutual acceptance.
  • Schedule inspections quickly and communicate repair requests on time.
  • Confirm appraisal access and follow up with your lender.
  • Verify wire instructions independently by phone before sending funds.
  • Review your Closing Disclosure and ask about any surprises.

• Seller checklist

  • Complete Washington-required seller disclosures promptly.
  • Send mortgage payoff details to escrow early.
  • Order condo or HOA resale documents as soon as possible.
  • Confirm who will sign, how they will sign, and required ID.
  • Match move‑out and key handoff to your possession terms.

Final thoughts and next steps

Escrow brings all the moving parts together so your sale can record on time in King County. If you know the timeline, understand each role, and prepare for local items like HOA estoppels and REET, you’ll reduce stress and avoid last‑minute surprises.

Have questions about your Bellevue or Eastside closing? Reach out to Sam Burke for clear next steps and hands‑on guidance from mutual acceptance to recording.

FAQs

How is earnest money handled in Washington escrow?

• Escrow holds your earnest money in a trust account and applies it to your closing per the written instructions in your contract and escrow documents.

How long does escrow take for a financed Bellevue home?

• Most financed transactions close in about 21–45 days, with many targeting around 30 days. Jumbo or complex loans may take longer.

When is my sale officially closed in King County?

• Your sale is finalized when escrow records the deed with the King County Recorder. Recording also makes the transfer public.

When do I receive the Closing Disclosure in Washington?

• Your lender must provide the Closing Disclosure at least 3 business days before consummation. Plan your signing and closing around this timing.

Who typically pays Washington’s Real Estate Excise Tax?

• In Washington, the seller is typically responsible for REET. Always confirm current rates and any exemptions with state and county authorities.

What commonly delays condo closings in Bellevue?

• HOA or condo estoppel documents can take 7–10 business days. Ordering them early helps keep your timeline on track.