Buying a home in Rochester comes with a lot of new terms, and “escrow” might be the most confusing. You hear it at offer time, again during inspections, and once more after closing when your lender talks about taxes and insurance. It is normal to feel overwhelmed.
This guide breaks escrow into plain-English steps so you know who holds your money, what happens if a contingency is used, and how lender escrow works after you get the keys. You will learn what is typical in Monroe County and how to avoid common surprises. Let’s dive in.
Escrow basics in New York
In New York, “escrow” has two common meanings:
- Escrow during the purchase: your deposit is held by a neutral third party until closing or until a contract condition is resolved. This secures your performance under the contract.
- Escrow after closing: your mortgage lender may set up an account to collect funds for property taxes, homeowners insurance, and some assessments. This is separate from your purchase deposit.
When most buyers ask about escrow, they mean the deposit held between offer acceptance and closing, not the lender account for taxes and insurance. Keep the two uses separate in your mind to avoid confusion.
Who holds your deposit in Rochester
In Rochester and across Monroe County, it is common for an attorney or a title company to hold your deposit in an escrow trust account.
- Attorneys: Many local buyers and sellers use attorneys. The buyer’s or seller’s attorney may hold the deposit in a client trust account and follow professional rules, which can include IOLA account requirements depending on setup.
- Title companies or settlement agents: Title firms often hold deposits and manage closing funds in dedicated escrow accounts.
- Real estate brokers: Some brokerages accept deposits, then keep them in a separate trust account or transfer them to the attorney or title company named in the contract. New York rules require strict recordkeeping and separation from operating funds.
Whoever holds the money should give you a written receipt and clear instructions. Your contract should name the escrow holder and describe how and when funds can be released.
Step-by-step timeline to closing
Timelines vary, but many Rochester purchases follow a similar path from accepted offer to closing.
1) Offer accepted and contract signed
Once both parties sign, your deal becomes binding based on the terms in the purchase offer and addenda. The first action item is usually delivering your deposit.
2) Deposit delivered
- Timing: many contracts call for delivery within 24 to 72 hours. Check your agreement.
- Method: certified check, bank check, or wire. Verify wiring instructions by phone using a trusted number.
- Receipt: get a written receipt from the escrow holder with the amount, date, and account details.
3) Inspections and mortgage steps
- Inspection period: buyers commonly have 5 to 14 days to complete inspections and request repairs or credits if the contract allows.
- Mortgage commitment: many contracts include a financing contingency with a commitment timeline, often 30 to 45 days. The exact dates are negotiated in your contract.
- Attorney review and title prep: your attorney helps negotiate terms, review the contract, and coordinate title, survey, and municipal searches.
4) Title search and commitment
A title company or attorney orders searches and issues a title commitment or report that shows liens, easements, and judgments. If issues are found, the seller is usually given time to cure before closing.
5) Final walkthrough and prep
You will confirm the home’s condition, finalize your mortgage, arrange homeowners insurance, and wire or bring certified funds for closing. Your deposit will be credited to your purchase price on the closing statement.
6) Closing, funding, and recording
At closing, you sign mortgage documents, funds are disbursed, title insurance is issued, and the deed and mortgage are recorded. After closing, if your loan has a lender escrow, that account starts managing your property taxes and insurance.
Typical total time to close in Rochester is about 30 to 60 days, depending on financing, title clearance, and seller timelines.
How contingencies impact your deposit
Your contract controls what happens to your deposit. Common contingencies and outcomes include:
- Inspection contingency: if allowed by your contract and used within the inspection window, you can usually cancel and receive a full deposit refund. If you waive this, your deposit may be at risk if you later try to cancel due to condition.
- Mortgage contingency: if you make a good-faith effort but cannot secure a loan within the agreed time and follow the notice requirements in the contract, your deposit is typically returned.
- Title or survey issues: if a defect is found and not cured within the contract’s timeframe, you may be able to cancel and recover your deposit, subject to the contract language.
If there is a dispute, the escrow holder generally keeps the funds until both parties agree, a court order is issued, or a contract dispute process resolves it. In some cases, the escrow holder may deposit the funds with the court through an interpleader action.
Local Rochester considerations
Buying in Monroe County comes with a few local nuances that can affect escrow and timing.
- Attorney-centered closings: Upstate New York practice often involves attorneys alongside title companies. Plan for attorney participation from offer through closing.
- Municipal checks: Unpaid city liens, water or sewer arrears, or property maintenance violations can appear on searches and delay closing. Funds may be held until issues are cleared.
- Tax and assessment proration: Closing statements in Rochester typically prorate property and school taxes. Understand how prorations affect your cash to close and lender escrow setup.
- Special assessments: Some properties carry charges for local improvements like sidewalks or sewers. Your title report and closing statement should flag these.
- Deposit size strategy: Deposit amounts vary by market conditions. A larger deposit can strengthen an offer, but review contract risks before increasing the amount.
- Wire fraud risk: Always verify wire instructions by phone using a known number for your attorney or title company. Do not rely on emailed instructions without independent verification.
Protections and rules you should know
- Written receipts: The escrow holder should provide a receipt and maintain accurate records of your funds.
- Named escrow holder: Your contract should state who holds the deposit and the conditions for release.
- Dispute process: Contracts often specify remedies such as liquidated damages or specific performance. If there is a conflict, your attorney can advise on the next steps.
- Lender escrow disclosure: If your loan includes a lender escrow, you will receive an initial analysis showing how taxes and insurance will be collected and paid on your behalf.
Lender escrow after closing
If your mortgage includes a lender escrow, your monthly payment will include a share for property taxes and homeowners insurance. The lender holds these funds and pays the bills when due.
- Initial deposit: At closing, the lender collects a starting amount to set up the account.
- Ongoing analysis: The lender performs periodic reviews to adjust for changes in tax or insurance costs.
- Separate from your deposit: Remember, the lender escrow is not the same as the purchase deposit you made at contract. Your deposit is credited at closing, while the lender escrow is a new account that begins after you own the home.
Buyer checklist for escrow and closing
Use this quick checklist to stay on track in Rochester.
Before you send the deposit
- Confirm who the escrow holder is and how funds must be delivered.
- Review all deposit and contingency deadlines with your attorney.
- Clarify how inspection requests will be handled and documented.
When you deliver the deposit
- Use a bank check, certified check, or verified wire.
- Call to verify wiring instructions using a trusted phone number.
- Get a written receipt with the deposit amount, date, and account details.
During the escrow period
- Complete inspections within the agreed window and keep all reports.
- Track your mortgage commitment date and provide lender documents quickly.
- Coordinate with your attorney on title, survey, and any municipal items.
At closing
- Review your Closing Disclosure or closing statement and confirm prorations.
- Verify the final amount to wire or bring via certified funds, then confirm wiring details by phone.
- After closing, confirm that the deed and mortgage have been recorded and understand how your lender escrow will pay taxes and insurance.
Smart tips for first-time buyers
- Involve a local real estate attorney early. They will help you understand your contract, protect your deposit, and manage title and closing tasks.
- Keep every deadline front and center. Calendar deposit, inspection, and financing dates and communicate quickly with your team.
- Do not waive contingencies without understanding the risk. A stronger offer should still protect your deposit when possible.
- Ask for a preliminary title report early so any issues can be addressed well before your target closing date.
Buying your first home in Rochester should feel organized and predictable. With the right plan, escrow becomes a simple checkpoint on your way to the keys. If you would like a local team to walk you through each step and keep you ahead of deadlines, connect with James "Bobby" Blaine and the JRB Home Team.
FAQs
What is escrow in a New York home purchase?
- It is your deposit held by a neutral third party, such as an attorney or title company, until closing or until a contract condition is resolved.
Who usually holds the deposit in Rochester?
- Often the buyer’s or seller’s attorney or a title company holds the funds in a trust account. Some brokers accept deposits but must follow state trust rules.
How fast do I need to deliver my deposit after acceptance?
- Many contracts require delivery within 24 to 72 hours. Check your agreement and follow the instructions for checks or wires.
What happens to my deposit if I cancel after inspection?
- If your contract includes an inspection contingency and you cancel within the allowed period, you typically receive a refund, subject to the contract’s terms.
If my mortgage is denied, do I lose my deposit?
- If you have a financing contingency and you act in good faith but cannot secure a loan within the timeframe, your deposit is usually returned under the contract.
What if the seller and I disagree about releasing the deposit?
- The escrow holder generally keeps the funds until both parties agree, a court order directs release, or a dispute process resolves it.
Is the deposit the same as the lender’s escrow for taxes?
- No. The purchase deposit is held during the transaction. The lender escrow starts after closing to pay property taxes and insurance from your monthly payment.
