The Life of An Escrow
The process of escrow is when, during a transaction between two or more parties, the written instrument, money or other items of value are transferred to a neutral third party. This neutral party, the escrow agent, holds the money or valued items for disbursement upon the occurrence of the specific event or performance of a specified condition.
An escrow agent impartially carries out the written instructions specified in the purchase contract by the principals. Thus, when escrow 'closes', it means that all of the specified requirements by both parties have been met and the money and property can then exchange hands.
What is happening During the Escrow Process?
Between the time escrow starts and ends, the agent performs several tasks:
- Prepares escrow instruction
- Performs a preliminary title search
- Works with lender
- Collects funds
- Prepares documents
- Makes financial calculations
- Ensures all conditions are met
- Records deeds and any other documents as instructed
- Requests issuance of the title insurance policy
- Closes escrow
- Disburses funds
Having a neutral third party keeping an 'eagle eye' on the terms and conditions of the sale makes for a much smoother process than if the buyer and seller were to be responsible for all of those tasks themselves.
