What Does It Mean When a Property Goes From "Available" to "in Escrow" on a Short Sale?

Short sale properties move from available status to "in escrow" when a deal is pending.
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If you're new to the real estate market, you'll probably hear a lot of terms you're not familiar with. Before diving head-first into any deals or transactions, take some time to review and understand what some commonly used terms actually mean. Short-sale properties are listed for sale -- also known as "available" -- like regular properties. When when there's a pending offer, they can be considered "in escrow." However, the terms and details of the short sale often differ from those of a regular sale.

Short Sale Properties

Properties listed as short sales are in pre-foreclosure. The homeowner has missed a few mortgage payments and the lender is trying to collect. In this situation, the homeowner can opt to try to sell the property for less than the outstanding mortgage loan balance with the lender's approval. After the lender agrees to the short sale, the homeowner lists the property for sale on the multiple listing service using a licensed real estate agent. The lender must review and agree to an offer presented by a qualified buyer for the sale to occur. In other words it's not up to the homeowner to agree to the offer -- it's up to the bank.

Available Listing

When a property is placed in the MLS as a short sale it is considered available or active. Potential buyers can make appointments to view the property with an agent. Additionally, they can make an offer on a home they want to purchase. Typically, available short-sale properties are listed at or around their appraised value. The appraised value is often lower than the unpaid loan balance due to depreciation. This is also known as being "underwater."

In Escrow

If an interested buyer makes an offer on the short-sale property and is moving forward with the sale, the status will change from available to "in escrow." The term is common in California and along the West Coast. When a real estate transaction is in escrow, earnest money deposits and loan documents are held by a third party not associated with the buyer or seller. The "escrow holder" is only allowed to distribute the money or paper work as the criteria in the purchase agreement is met by either party. It's possible for a deal to fall through, and the listing to show that the property is again available. In other parts of the country, the terms "contingent" or "pending" are generally used instead of "in escrow." The term "escrow holder" also is not commonly used in the same fashion in other parts of the country.


Buyers often find good bargains when purchasing a short-sale home. However, there are a few things to be mindful of. First, after the buyer accepts your offer he must present it to the lender, who will make the final decision. This might extend the purchasing process as compared to that of buying a property in the traditional way. Additionally, the property may be sold "as is," meaning the seller or lender is not willing to make any repairs as part of the final sales contract.

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