The escrow process is one of the most sensitive phases of a real estate transaction. It’s where the details matter most—and where missteps can easily delay or even derail a deal. By identifying potential problems early, agents can keep things moving smoothly toward a successful closing. Here are five common red flags during escrow that every real estate professional should keep an eye on.
Incomplete or Incorrect Paperwork
Errors in paperwork—like missing signatures, outdated forms, or mismatched names—can bring the entire transaction to a halt. These mistakes often surface late in the game, when time is tight and corrections become more complicated. Reviewing documents thoroughly from the beginning is critical to avoiding last-minute issues. Staying on top of compliance requirements ensures your file doesn’t trigger unnecessary delays.
Delayed Earnest Money Deposit
If the buyer doesn’t submit the earnest money deposit on time, it could be a sign of uncertainty or financial issues. This can raise concerns for the seller and threaten the strength of the agreement. Escrow won’t proceed without this key step, and missing the deadline may breach the contract. Stay proactive by confirming the deposit is submitted and received as agreed.
Lack of Communication from Key Parties
Smooth escrow requires consistent communication among the agent, escrow officer, lender, and clients. When responses slow down—or worse, stop completely—it may signal trouble ahead. Unresponsiveness can result in missed deadlines or overlooked issues, especially as the closing date approaches. Regular check-ins with all parties help avoid surprises and keep everyone accountable.
Unclear or Overlooked Contingency Deadlines
Inspection, appraisal, and loan approval contingencies come with hard dates that must be met to keep the deal alive. If these timelines aren’t clearly communicated and tracked, they can easily slip through the cracks. Missed contingency deadlines can place earnest money at risk or create legal challenges. Make sure everyone involved understands the key dates and responsibilities tied to them.
Title or Property Issues
Title surprises—like unpaid liens, easements, or unresolved ownership—can surface late in the escrow process and take weeks to resolve. These issues may not appear until the title report is reviewed, potentially creating panic as the closing date nears. Ordering and reviewing the preliminary title report early in the transaction can reveal problems before they escalate.
Real Estate Transaction Coordinators Make Escrow Easy
Escrow is where deals come together—or fall apart. Identifying red flags early and addressing them proactively can mean the difference between a smooth closing and a stressful one. When you’re prepared, organized, and vigilant during escrow, you position yourself as a trusted professional in the eyes of your clients and colleagues.
One of the most effective ways to stay ahead of these issues is by partnering with a professional transaction coordinator. A TC ensures every detail is handled accurately and on time, freeing you up to focus on growing your business. If you’re ready to streamline your transactions and avoid costly delays, reach out to us today. We’d love to help support your success.
