Buying or selling a home in Ann Arbor and hearing the word “escrow” tossed around? You are not alone. Escrow can feel mysterious, especially when you are juggling inspections, financing, and moving plans. This guide breaks escrow down in plain English, shows how closing works in Washtenaw County, and gives you practical steps to move from offer to keys with confidence. Let’s dive in.
Escrow explained in Michigan
Escrow is a neutral holding process that protects both buyer and seller while a home sale moves toward closing.
- Transaction escrow: A neutral third party holds money and key documents until the purchase agreement conditions are met. This usually includes your earnest money deposit and the funds that get disbursed on closing day.
- Escrow account after closing: Your loan servicer may set up an impound account to collect and pay property taxes and homeowners insurance from your monthly mortgage payment.
- Who acts as escrow agent: In Michigan, a title company, a closing agent, an attorney, or a real estate brokerage trust account can hold escrowed funds, depending on the contract and local practice. In Washtenaw County, title companies commonly handle closings and provide title insurance.
- Federal disclosures: If you have a mortgage, federal rules require your lender to give you a Loan Estimate early and a Closing Disclosure at least three business days before you sign. These forms outline your loan terms and closing costs.
Ann Arbor closing timeline, step by step
1) Offer accepted and earnest money
Once your offer is accepted, the purchase agreement sets deadlines and contingencies. You typically deliver an earnest money deposit to the escrow holder named in the contract. The amount is negotiated and can vary with the market. Keep your receipt and confirm who holds the funds and under what terms they can be released.
2) Open escrow and order title
The buyer, lender, or seller instructs a title company or closing agent to open escrow. The title company conducts a title search and issues a title commitment that lists liens, easements, or other items that must be cleared or excepted before closing.
3) Inspections, appraisal, and underwriting
You complete the home inspection and negotiate any repairs or credits. The lender orders an appraisal to confirm value. During underwriting, your lender verifies income, assets, and the property details. Mortgage borrowers receive a Closing Disclosure at least three business days before signing, so review it early and ask questions.
4) Clear title and satisfy contingencies
Any title issues, such as old liens or releases, must be resolved. Inspection, appraisal, and financing contingencies are addressed as your contract specifies. If a dispute arises over contingency deadlines or deposits, the escrow agent follows the contract terms, and parties may need mediation or legal guidance.
5) Closing day
On closing day, buyers sign loan documents, including the promissory note and mortgage. Sellers sign the deed and affidavits. Buyers bring funds to close by wire transfer or certified cashier’s check, depending on the title company’s policy. Many local title companies require a wire. Always verify wiring instructions by calling a known, published number for the title company.
The closing agent disburses funds, pays off any seller mortgages or liens, pays commissions, records the deed and mortgage with the Washtenaw County Register of Deeds, and issues title insurance policies.
6) Recording and keys
The transfer becomes official when the documents are recorded. Recording is often completed the same day or within a few business days, depending on county volume. Keys are typically released after funding and recording are confirmed. You receive a final settlement statement that itemizes all debits and credits. For mortgage borrowers, the Closing Disclosure serves this role.
Money at closing: what to expect
Earnest money
- Amount is negotiated in the offer. Your deposit is held in escrow as the contract directs.
- If contingencies are met and the sale closes, the deposit is applied to your closing costs or down payment.
- If a deal fails and there is a dispute, funds may be held until the parties agree or a court decides, so track your contingency deadlines closely.
Buyer funds
- Expect to provide a wire or certified funds for cash to close. Confirm the exact amount with the title company.
- Your Closing Disclosure shows cash to close for financed purchases. Ask for any updates at least one business day before signing.
Seller proceeds
- After paying off mortgages, commissions, prorations, and closing costs, sellers receive net proceeds from the closing agent by wire or check.
Prorations
- Property taxes, utilities, HOA dues, and assessments are prorated as of the closing date. Methods can vary by contract, so confirm the proration language in your agreement and ask the title company how they calculate taxes in Washtenaw County.
Who typically pays what
Custom varies by market and contract. In many Michigan transactions:
- Buyers often pay lender fees, appraisal, credit report, lender’s title policy and related escrow fees, recording fees for the mortgage, and prepaid items for tax and insurance escrows.
- Sellers commonly pay real estate commissions, mortgage payoffs, recording fees for the deed and releases, and sometimes the owner’s title policy. Who pays for the owner’s policy can vary in Washtenaw County. Confirm the local custom and your specific contract.
Transfer taxes and recording fees
- Fees depend on current county and state schedules and the number of recorded documents. Verify current transfer tax and recording costs with the Washtenaw County Register of Deeds or your title company before closing.
Ann Arbor specifics to watch
Title problems and liens
Municipal liens, contractor liens, unpaid taxes, or old mortgages can slow closing if discovered late. Ask the title company to surface issues early, and allow time for payoffs and releases.
Condos and HOAs
Resale condos often require association documents, budgets, and estoppel letters. Response times can vary, so build extra time into your timeline in the Ann Arbor condo market.
University-area rentals
Homes near the University of Michigan may be tenant occupied or subject to active leases. Clarify lease assignments, security deposit handling, and occupancy timing early. Make sure your contract addresses delivery of possession and any rent prorations.
Wire fraud safety
Email instructions can be spoofed. Protect yourself by:
- Calling a known number for the title company to confirm wiring instructions.
- Verifying account details again on the day of the transfer.
- Avoiding last-minute changes received by email without live confirmation.
Earnest money disputes
If a contingency fails, the contract controls how funds are released. If parties disagree, the escrow agent may hold funds until there is a mutual release or a court order. Track dates and keep written notices within the time frames set in your purchase agreement.
Timeline and expectations
A typical Ann Arbor transaction from contract to closing runs about 30 to 45 days. Actual timing depends on financing, appraisal and underwriting speed, title clearance, association response times for condos, and seller move-out needs. Recording turn times can vary with county volume, so ask your title company for current expectations.
Remote or mobile signings may be available through your title company and lender, subject to legal and lender requirements. Confirm early if you need a remote option.
What you will review and sign
- Purchase agreement: The contract that sets price, contingencies, deadlines, and closing date.
- Earnest money receipt or escrow agreement: Shows how much was deposited and who holds it.
- Title commitment and exceptions: Outlines what will be insured and any exclusions that need review.
- Deed: Warranty deed is common for sales. Quitclaim deeds are sometimes used for intra-family transfers or to cure title issues.
- Mortgage and promissory note: The security instrument and repayment promise for financed purchases.
- Closing Disclosure: For most mortgages, delivered at least three business days before you sign.
- Settlement statement: The final accounting of costs, credits, and proceeds. Cash deals or non-TRID transactions may use a settlement statement similar to a HUD-1.
Local roles at the table
- Title company or closing attorney: Opens escrow, runs title search, prepares the deed and settlement statements, coordinates payoffs, manages closing funds, and records documents with the county.
- Lender: Orders appraisal, provides disclosures, approves underwriting, funds the loan, and reviews final title conditions.
- Real estate agents: Guide negotiations, monitor deadlines, coordinate inspections and repairs, and communicate with the title company.
- County offices: The Washtenaw County Register of Deeds records the deed and mortgage. The Washtenaw County Treasurer handles property tax status and delinquencies that can affect closing.
Buyer checklist for closing
- Bring government-issued ID for all signers.
- Verify wiring instructions by phone and send funds early enough for same-day receipt.
- Review the Closing Disclosure at least three business days before closing and ask questions right away.
- Complete your final walkthrough 24 to 48 hours before closing.
- Confirm utility transfers, final meter readings, and move-in timing.
- Ask how property taxes will be prorated and whether any assessments apply.
Seller checklist for closing
- Bring ID and any documents requested by the title company.
- Confirm mortgage payoff amounts close to the closing date, since payoff statements expire.
- Provide receipts for agreed repairs and any required disclosures.
- Coordinate move-out and leave keys, remotes, and manuals per the contract.
- If your property is in an HOA or condo association, deliver required documents early to avoid delays.
Proven process, clear communication
You do not need to be an expert on escrow to have a smooth closing. You do need a team that tracks deadlines, anticipates title and loan requirements, and explains each step in plain language. That is where a contract-smart advisor makes a difference. With a focus on education, careful document review, and steady communication with your lender and title company, you can close on time and with confidence in Ann Arbor.
If you want a closing plan tailored to your timeline, ask us to walk you through fees, documents, and wiring procedures before you sign. When you are ready to buy or sell, reach out to Five Star Luxury Realty for clear guidance from offer to keys.
FAQs
Who holds earnest money in Ann Arbor home sales?
- The purchase agreement controls. Common holders include a title company or closing agent, a brokerage trust account, or an attorney’s escrow. Confirm the named holder in your contract.
When will my Ann Arbor purchase be recorded and finalized?
- Recording usually occurs the same day or within one to three business days after funding, depending on county volume. Keys are typically released after funding and recording.
What is the Closing Disclosure and when do I get it?
- For most mortgages, your lender must provide a Closing Disclosure at least three business days before signing. It lists your loan terms and all closing costs.
Can I close remotely on a Washtenaw County home?
- Many title companies offer remote or mobile signings, subject to legal and lender requirements. Ask early so your closing is set up correctly.
Who pays for the owner’s title policy in Michigan?
- Custom varies by market and contract. In many Michigan transactions the seller pays the owner’s policy, but you should confirm the local practice in Washtenaw County and what your agreement states.
