When opening Escrow, as a buyer or seller, you want to be sure that all the terms and conditions of the sale have been met before the transfer of ownership of that property. Escrow is a written agreement of these terms and conditions held by a neutral third party known as the Escrow Holder. The Escrow Officer has the responsibility to impartially carry out the written instructions given by the principals making sure that all conditions are met by both parties. In other words, the Escrow Officer makes sure that the interest of all parties to the transaction are protected.
To do this, the Escrow Officer takes instructions from the terms of the purchase agreement and the lender’s requirements. This includes receiving funds and documents necessary to comply with the agreement, completing and obtaining required forms and handling final delivery to the proper parties upon completion of the escrow. Necessary information to complete the transaction must be provided to the Escrow Officer. These elements include loan documents, tax statements, fire and hazard insurance, terms of sale and any seller-assisted financing along with requests for various services that may be paid from the escrow funds.
It is the buyer’s responsibility to make necessary arrangement if financing is needed. Proof of the loan agreement must be in the hands of the Escrow Officer before the transfer of property can take place. When all instructions in the escrow have been completed, the closing can take place. At that time, all outstanding funds are collected and any fees such as title insurance, recording fees, real estate commissions, loan payoffs, etc. are disbursed. Title to the property is then transferred under the terms and conditions of the escrow instructions and appropriate title insurance is issued.
