Who holds escrow money in for sale by owner?

When selling a property as a For Sale By Owner (FSBO), one of the common questions that arises is: Who holds the escrow money in a FSBO transaction? Escrow money is a form of good faith deposit that is typically held by a third party until the completion of the real estate transaction. In a traditional real estate transaction, the escrow money is usually held by a title company or real estate attorney. However, in a FSBO transaction, the answer to this question may vary.

**Who holds escrow money in for sale by owner?**

In a For Sale By Owner transaction, the party holding the escrow money can be negotiated between the buyer and the seller. Some common options for holding escrow money in a FSBO transaction include:

1. **Title company:** This is a common choice for FSBO transactions, as title companies have experience handling real estate transactions and ensuring that the escrow money is secure.

2. **Real estate attorney:** A real estate attorney can also hold the escrow money in a FSBO transaction, ensuring that all legal and financial aspects of the transaction are handled properly.

3. **Escrow service:** Some sellers and buyers opt to use an escrow service to hold the escrow money in a FSBO transaction, providing an unbiased third party to oversee the transaction.

4. **Seller’s broker:** In some cases, the seller’s real estate broker may agree to hold the escrow money in a FSBO transaction, providing a level of security and oversight.

5. **Buyer’s broker:** Similarly, the buyer’s real estate broker may be willing to hold the escrow money in a FSBO transaction, ensuring that the transaction proceeds smoothly.

6. **Homeowner’s association:** If the property is located in a community with a homeowner’s association, the association may be willing to hold the escrow money in a FSBO transaction.

7. **Bank or credit union:** Some buyers and sellers choose to have a bank or credit union hold the escrow money in a FSBO transaction, providing a secure and regulated option.

8. **Online escrow company:** With the rise of online services, some FSBO transactions opt to use an online escrow company to hold the escrow money, providing convenience and security.

9. **Mortgage lender:** In certain situations, the buyer’s mortgage lender may agree to hold the escrow money in a FSBO transaction, ensuring that the funds are handled properly.

10. **Real estate investment company:** For unique FSBO transactions, a real estate investment company may offer to hold the escrow money, providing a quick and efficient solution.

11. **Mutual agreement between buyer and seller:** Ultimately, the decision on who holds the escrow money in a FSBO transaction is up to the buyer and the seller, and they can come to a mutual agreement on this aspect of the transaction.

12. **Neutral third party:** Some FSBO transactions involve hiring a neutral third party, such as a mediator or arbitrator, to hold the escrow money and oversee the transaction, ensuring fairness and transparency.

In conclusion, when it comes to who holds escrow money in a For Sale By Owner transaction, there are several options available for buyers and sellers to consider. It is important for both parties to discuss and agree upon the best option that provides security, transparency, and peace of mind throughout the transaction.

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