Heard the word “escrow” and wondered what it actually means when you buy a home in Portland? You are not alone. Escrow can feel mysterious until someone walks you through the steps in plain English. In this guide, you will learn how escrow works here in Multnomah County, what happens to your money and documents, and how to keep your purchase on track from offer to recording. Let’s dive in.
Escrow, in plain English
Escrow is a neutral process and account that holds your funds and manages required documents until all contract conditions are met and your purchase can close. A licensed escrow or closing agent follows written instructions from you and the seller, coordinates with your lender and the title company, and then disburses funds and records the deed when everything is ready.
In Oregon, title companies, independent escrow companies, or attorneys commonly handle closings. Recording your deed with Multnomah County makes your ownership public and final.
Who does what in Portland closings
- You and the seller: Sign the purchase contract and escrow instructions, meet deadlines, and provide funds or documents as required.
- Your real estate agent: Helps set timelines, schedules inspections, negotiates repairs or credits, and keeps everyone on task.
- Escrow or title company: Opens the file, holds earnest money, orders the title search and preliminary title report, prepares settlement statements, and disburses funds at closing.
- Lender (if financing): Approves your loan, orders the appraisal, issues loan conditions, and wires funds for closing.
- Title insurer: Issues the lender’s title policy and, if you choose, your owner’s policy. Works to address title defects.
- Multnomah County recording office: Records the deed and any mortgage, which finalizes the transfer and makes it part of the public record.
The escrow timeline at a glance
Every contract is unique, but many financed purchases in Portland close in about 30 to 45 days. Cash deals can close faster, sometimes within 7 to 14 days, if title is clear and the seller is ready. Here is the typical flow from offer to recording.
Step 0: Offer accepted
Your signed purchase agreement becomes the controlling contract. Your earnest money deposit is due as the contract specifies, often within a few business days.
Step 1: Escrow opened
The title or escrow company receives the contract and opens your escrow file. You get instructions on how and when to deposit earnest money into a secure trust account.
Step 2: Inspections and due diligence
You schedule inspections such as general home, sewer scope, or pest, based on your contract choices. Inspection periods commonly run 5 to 15 days in many markets. You can approve results, negotiate repairs or credits, or cancel per your contingency terms.
Step 3: Loan and appraisal (if financing)
You complete your loan application. The lender orders the appraisal and title work. The home must appraise for a value that supports your loan. If the appraisal comes in low, you and the seller will need to renegotiate, you may challenge the appraisal, add cash, or you may have the right to cancel depending on your contract.
Step 4: Title search and preliminary report
The title company issues a preliminary title report listing easements, liens, and other exceptions. You and your lender review it. Any liens must be cleared or paid at closing.
Step 5: Final walk-through and closing figures
You typically do a final walk-through shortly before closing to confirm the property’s condition. Escrow prepares your closing statements and, for most consumer mortgages, you receive a federal Closing Disclosure. By rule, your lender must deliver the Closing Disclosure at least 3 business days before you sign final loan documents.
Step 6: Signing and funding
You and the seller sign closing documents at the escrow or title office or through approved remote options. You send your remaining down payment and closing costs by cashier’s check or wire using verified instructions. After all conditions are satisfied, the lender wires loan funds to escrow.
Step 7: Recording with Multnomah County
Escrow submits the deed and any mortgage documents to the county recorder for recording. Recording makes your ownership official. Keys are released as your contract specifies, usually upon confirmation of recording.
Step 8: Final disbursements and policies
Escrow pays off the seller’s mortgages, clears liens, pays commissions and fees, and releases net proceeds to the seller. The lender’s title insurance policy is issued, and if you opted for an owner’s policy, that is issued too.
How your money moves safely
Earnest money
Your earnest money goes into the escrow company’s trust account. If your purchase closes, it is credited to your down payment and closing costs. If the transaction cancels, the contract dictates how that deposit is released.
Down payment and closing costs
You bring the balance of your down payment and closing costs at signing, typically by cashier’s check or secure wire. Escrow will give you exact instructions. Never send funds until you verify instructions by phone using a trusted number.
Lender funds
Once you sign and all loan conditions are satisfied, your lender wires money to escrow. Escrow cannot disburse those funds until the lender confirms funding and recording is on track.
Documents and recording
Escrow prepares the deed, coordinates payoff demands for the seller’s liens, and collects any required affidavits or disclosures. After funding, escrow sends the deed and mortgage to Multnomah County for recording. You will receive copies once recording is complete.
Contingencies that protect you
Common buyer protections in the contract include:
- Home inspection contingency: Lets you negotiate repairs or credits or cancel within the inspection period.
- Financing contingency: Your duty to close depends on securing final loan approval.
- Appraisal contingency: If the appraisal is lower than the price, you can renegotiate or cancel per the contract.
- Title contingency: You must accept the preliminary title report. Unresolved liens need a plan to clear before closing.
Common delays and how to avoid them
- Low appraisal: Discuss options early. You may renegotiate, request a reconsideration of value, bring additional cash, or cancel if your contingency allows.
- Lender underwriting issues: Respond quickly to document requests and keep income and assets stable during underwriting.
- Title defects or liens: Ask escrow for a written plan to clear each item. Some issues require payoff statements or corrective documents.
- HOA requirements: If the property is in an association, allow time for required documents and confirmations.
- Seller logistics: Confirm move-out timing and any rent-back agreements in writing.
Red flags and buyer protections
- Last-minute wiring changes: Treat any new wiring instructions as suspicious. Always call the escrow company using a verified phone number before sending funds.
- Title exceptions you do not understand: Ask the title officer to explain each exception and how it will be handled.
- Ownership mismatches: The preliminary title report should show all owners of record. Ask questions if anything looks off.
- Appraisal discrepancies: Clarify your contract options the moment you get the report.
Portland specifics and next steps
- Who handles closing: In Oregon, most closings are handled by title companies or independent escrow firms. Confirm the company name and your file number early.
- Recording window: Recording with Multnomah County often occurs the same day funds are cleared or within 1 to 2 business days, depending on the county schedule.
- Federal timing rule: For most residential loans, your lender must deliver the Closing Disclosure at least 3 business days before you sign. Build that into your timeline.
Your escrow checklist
- Confirm who will open escrow and request contact information and your file number.
- Calendar your deadlines: inspection period, financing contingency, appraisal target date, signing date, and closing date.
- Ask for a preliminary closing statement early so you can review estimates and prepare funds.
- Verify how to deliver earnest money and to whom any check or wire should be made payable.
- Before sending any wire, call the escrow company using a number you find independently to confirm the instructions.
Get a calm, process-driven guide
You deserve a clear, low-stress path from offer to keys. If you want experienced help coordinating escrow, explaining title reports, and keeping your closing on time, the team at McNamara Group is ready to guide you. Request a confidential consultation and free home valuation to start planning your next step with confidence.
FAQs
What does “escrow” mean when buying in Portland?
- Escrow is a neutral service that holds your funds and manages required documents until all contract terms are met, then disburses money and records the deed with Multnomah County.
How long does escrow usually take in Multnomah County?
- Many financed purchases close in about 30 to 45 days from offer acceptance, while cash deals can close in 7 to 14 days if title is clear and the seller is ready.
When do I receive the Closing Disclosure for my mortgage?
- For most residential loans, federal rules require that your lender deliver the Closing Disclosure at least 3 business days before you sign final loan papers.
What happens to my earnest money if the deal falls through?
- The purchase contract controls the outcome. If you cancel within a valid contingency, you are typically entitled to a refund. If you default, the seller may have remedies.
What are the biggest escrow delays for Portland buyers?
- Low appraisals, lender underwriting issues, title defects or liens, HOA documentation delays, and seller move-out logistics are common causes.
How can I avoid wire fraud during closing?
- Never rely on email alone. Verify wiring instructions by calling the escrow company using a trusted phone number before you send any funds.
Do I need owner’s title insurance?
- Lenders usually require a lender’s policy. An owner’s policy is optional but commonly recommended to protect your equity against covered title issues.
