What is Escrow?
Escrow is a service which provides the public with a means of protection in the handling of funds and/or documents. Escrow enables the buyer and the seller to transact business with each other through a neutral party, thereby minimizing their risk.
In the escrow, all parties involved give their instructions to this neutral intermediary, the "escrow holder" whose duty it is to assure that no funds or property will change hands until all instructions have been carried to completion.
What the escrow officer does:
The escrow officer does . . .
- serve as the communication link to all parties in the transaction.
- prepare escrow instructions.
- request a preliminary title search to determine the basis upon which a title insurance policy may be issued.
- request a beneficiary's statement or pay-off demand relating to existing financing.
- comply with lender's requirements, specified in escrow agreement.
- receive purchase funds from the buyer.
- prepare or secure the deed or other documents related to escrow.
- prorate taxes, interest, insurance and rents according to instructions.
- secure releases of all contingencies or other conditions as imposed on any particular escrow.
- record deeds and any other documents as instructed.
- request issuance of the title insurance policy.
- close escrow when all of the instructions of buyer and seller have been carried out.
- disburse funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.
- prepare final statements for the parties accounting for the disposition of all funds deposited in escrow.
The escrow officer does not . . .
- offer legal advice.
- negotiate the transaction.
- offer investment advice.
