Buying or selling in Middle TN and wondering what happens to your money between contract and keys? You are not alone. Escrow can feel mysterious the first time you go through it, especially when timelines and paperwork start moving fast. In this guide, you will learn how escrow works in Tennessee, the typical timeline, who does what, and simple steps to avoid delays. Let’s dive in.
Escrow basics in Middle Tennessee
Escrow is a neutral holding of funds and documents by an impartial third party until the contract conditions are met and closing occurs. It protects both sides by ensuring money and signed papers do not change hands until inspections, title, and financing are complete or waived. Your purchase agreement sets the rules for deadlines, disbursements, and the escrow agent’s duties. For financed buyers, the lender follows federal disclosure rules, including the Closing Disclosure timing.
Escrow holders in Middle Tennessee
Title companies commonly act as escrow and settlement agents for residential closings. Some transactions use a closing attorney. In certain cases, a real estate broker may hold earnest money in a trust or escrow account according to brokerage policy and state rules. The contract names the escrow holder, so confirm this early and keep their contact details handy.
Step-by-step timeline
While your contract controls exact dates, here is a typical flow:
- Offer accepted and contract executed (Day 0)
- You sign the purchase agreement, which names the escrow holder and outlines earnest money instructions.
- The title or escrow office opens the file and starts coordination.
- Earnest money deposit (within 1 to 3 business days)
- You deliver earnest money by check or wire per the contract.
- You receive a receipt confirming the funds are in escrow.
- Inspection period and due diligence (commonly 5 to 14 days)
- You complete general and any specialized inspections.
- You may negotiate repairs or credits with the seller via addendum.
- Loan application, appraisal, and financing contingency (often 21 to 30 days)
- You complete your loan application and provide documentation.
- The lender orders the appraisal and reviews your file against the financing deadline.
- Title search and commitment (starts early, usually delivered in 1 to 3 weeks)
- The title company issues a commitment detailing liens, easements, and items to resolve before closing.
- Survey and title exception clearance (timing varies)
- If required, a survey or affidavit is obtained. Any encroachments or exceptions are addressed.
- Closing Disclosure and final loan review
- Your lender must deliver the Closing Disclosure at least 3 business days before closing.
- You review final loan terms and estimated costs.
- Final walkthrough (24 to 72 hours before closing)
- You check property condition and confirm agreed repairs are complete.
- Closing and signing (commonly 30 to 45 days from contract for financed buyers)
- You sign closing documents and provide your remaining funds.
- Seller payoffs are processed and the deed is recorded with the Register of Deeds office, typically on the day of closing or the next business day.
- Disbursement and after closing
- The escrow agent disburses funds per instructions and issues the final settlement statement.
- Title insurance policies are issued. Keys are delivered per the contract, often after recording.
Funds and key documents
Funds in escrow
- Earnest money deposit from the buyer.
- Buyer’s closing funds and down payment by certified check or wire.
- Repair holdbacks or other agreed funds, if applicable.
- Lender’s loan funds for the buyer’s mortgage.
Documents you will see
- Purchase agreement and any addenda, including inspection and repair agreements.
- Earnest money receipt and escrow instructions.
- Title commitment and supporting exception documents.
- Inspection reports and appraisal report.
- Closing Disclosure for financed buyers and the settlement statement.
- Deed signed by the seller and buyer’s loan documents.
- Affidavits and payoff statements for existing liens.
Closing disbursements
- Payoff of seller’s mortgage and liens.
- Real estate commissions and title or recording fees.
- Prorated property taxes, HOA dues, and utilities as agreed.
- Seller’s net proceeds.
Roles and responsibilities
Escrow agent or title company
- Holds earnest money, performs the title search, and issues the title commitment.
- Prepares settlement statements, coordinates recording, and disburses funds.
- Coordinates mortgage payoffs and delivers final documents.
Buyer’s lender
- Underwrites the loan, orders the appraisal, and provides the Closing Disclosure.
- Wires loan funds to the closing.
Buyer’s agent
- Guides you on timelines, inspections, and contingencies.
- Coordinates inspections, repair negotiations, and the final walkthrough.
- Communicates with the lender and title company to keep the file moving.
Seller’s agent
- Helps the seller provide disclosures and HOA documents and coordinates repairs.
- Works with the title company on deed preparation, affidavits, and payoff details.
Middle Tennessee norms and timing
- Escrow holder: Title companies are commonly used for escrow and settlement. Some closings involve attorneys.
- Earnest money: Amounts vary by price point and market. You will often see a percentage of the purchase price, such as 1 to 2 percent, or a negotiated flat amount.
- Closing window: Financed purchases often close in 30 to 45 days. Cash or highly prepared buyers can close faster if both sides agree.
- Recording: Deeds are recorded with the Davidson County Register of Deeds, often the same day or the next business day depending on the title company and the recording office schedule.
Pitfalls and local tips
- Wire fraud: Verify wiring instructions by phone using a known number before sending any funds. Do not rely on email-only instructions.
- Earnest money mishandling: Follow the contract instructions and get a receipt for your deposit.
- Late title issues: Encourage early title work to address liens, judgments, or easements promptly.
- HOA documents: Request association documents early to avoid lender delays.
- Recording and keys: Clarify whether keys transfer at signing or after recording, and put it in the contract.
Buyer and seller checklists
Buyer checklist
- Signed purchase agreement and all addenda.
- Earnest money receipt and escrow contact details.
- Inspection reports and any repair agreements.
- Lender items, including your Closing Disclosure.
- Government-issued ID and certified funds or wire instructions for closing.
- Homeowner’s insurance binder for your lender.
Seller checklist
- Signed deed and required affidavits from the title company.
- Mortgage payoff information for all liens.
- State and local property disclosures and HOA or condo documents if applicable.
- Government-issued ID for closing and any keys or access info.
Escrow disputes
Contract instructions control how escrowed funds are released. If there is a disagreement, the escrow agent generally holds funds until both parties provide written direction or until the dispute process in the contract is followed. If needed, the escrow holder may interplead funds into court. Keep all receipts, emails, and signed addenda in case a dispute arises.
Closing day and after
Expect to sign documents at the title company’s office or attorney’s office. For financed buyers, the Closing Disclosure arrives at least 3 business days before closing, which gives you time to review terms and costs. After signing, the escrow agent records the deed and disburses funds. Keys are delivered based on your contract, often after recording is confirmed.
Ready for a smooth closing? If you want a clear plan, steady communication, and local coordination from contract to keys, connect with Sandra Hill.
FAQs
What is escrow in Tennessee real estate?
- Escrow is a neutral holding of funds and documents by a third party that releases them only when your contract conditions are met and the transaction closes.
How much earnest money is typical?
- Amounts vary by price and market conditions, but you will often see 1 to 2 percent of the purchase price or a negotiated flat amount stated in the contract.
When do I receive the Closing Disclosure?
- For most financed purchases, your lender must provide the Closing Disclosure at least 3 business days before closing so you can review final terms and costs.
Who usually holds earnest money in?
- A title company commonly holds earnest money, though an attorney or the real estate broker’s trust account may hold it depending on what the contract specifies.
When do I get the keys?
- Keys are delivered per the contract, which often specifies after recording of the deed with the Davidson County Register of Deeds.
How long does escrow take for financed buyers in Middle Tennessee?
- Many financed transactions close in about 30 to 45 days from contract acceptance, though timing depends on your contract, lender, and title work.
How are escrow disputes handled in Middle Tennessee?
- The escrow agent follows the dispute language in the contract and may hold funds until written agreement, pursue mediation or arbitration if required, or interplead funds into court when necessary.
