What Happens if a Dispute Arises During Escrow
Even with a neutral third party, sometimes disagreements can crop up during the escrow process. It's not uncommon for unexpected issues to arise, whether it's a difference in opinion about a property's condition after an inspection or a delivered item not quite matching the description. Understanding how disputes are handled in escrow can save you a lot of stress and guide you toward a resolution.
The escrow holder's role is typically to follow the instructions agreed upon by both parties. If a dispute arises, their primary function isn't to take sides but to halt the transaction until the parties reach a new agreement or until a court order dictates how to proceed. Often, the escrow agreement will have provisions for mediation or arbitration to help resolve these impasses outside of court. If an agreement cannot be reached, funds may be held until the dispute is legally settled, or a buyer might be able to withdraw their offer, depending on the terms. The key takeaway: clear communication and a well-defined escrow agreement are your best defenses against prolonged disputes.
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