Explaining Escrow
Your Partner in the Closing Process
Fair, Secure & Communicative
Neutral 3rd Party
Escrow is a neutral third party, who holds funds and important documents related to a real estate transaction.
Security & Protection of Funds
Safe environment for the transfer of funds and documents to protect both buyers and sellers from fraud and financial losses.
Transfer of Real Property
Facilitate a secure transfer of real property ownership and funds between the buyer and the seller.
Escrow Explained
History
Escrow has been used in real estate transactions for over a century. It originated in the western United States as a way to protect both buyers and sellers from fraud and financial losses. Escrow agents, also known as escrow officers, act as intermediaries between the parties and hold funds and documents until all conditions of the sale have been met.
Purpose
The purpose of escrow in a real estate transaction is to provide a secure and neutral environment for the transfer of funds and documents. The escrow process typically begins when a buyer and seller sign a purchase agreement and deposit funds with the escrow agent. The agent then holds the funds and documents until all conditions of the sale have been met, such as a home inspection or the release of liens on the property.
During the escrow period, the escrow agent acts as a neutral third party and follows the instructions of both the buyer and seller. Once all conditions have been met, the escrow agent releases the funds and documents to complete the transaction. This ensures that all parties have fulfilled their obligations and reduces the risk of fraud or financial losses.
Escrow is also used to facilitate the payment of property taxes and insurance premiums. These funds can be held in escrow by the mortgage lender and disbursed on a regular basis to ensure that these obligations are met. This helps to protect the lender’s interest in the property and provides added security for the homeowner.
Overall, the escrow process is a critical component of a real estate transaction. It provides a secure and neutral environment for the transfer of funds and documents and helps to protect both buyers and sellers from fraud and financial losses.
