What Is An Escrow?
When opening an escrow, the buyer and seller establish terms and conditions for the transfer of ownership of that property. These terms and conditions are given to a neutral third party known as the Escrow Holder or Title Company. The Escrow Officer, in turn has the responsibility of seeing that the terms of the escrow are carried out. The escrow is an independent third party - the vehicle by which the interest of all parties to the transaction are protected.
How Does The Escrow Process Work?
The Escrow Officer takes instructions based on the terms of your Purchase Agreement and the lender's requirements. The Escrow Officer can hold inspection reports and bills for work performed as required by the Purchase Agreement. Other elements of the escrow include hazard and title insurance, and the grant deed from the seller to you. Escrow cannot be completed until these items have been satisfied and all parties have signed escrow documents.
What Does The Escrow Holder Do?
The Escrow Holder is a neutral third party that maintains the escrow and impartially oversees the escrow process, ensuring that all conditions of the sale are properly met. The Escrow Holder's duties include:
- Serve as the neutral agent and the liaison between all parties involved.
- Prepare the escrow instructions.
- Request a Preliminary Title Search to determine the status of title to the property.
- Comply with the lender's requirements as specified in its instructions to escrow.
- Receive and handle purchase funds from the buyer.
- Prepare or secure the deed and documents related to the escrow.
- Prorate taxes, interest, insurance and rents.
- Secure releases of all contingencies or other conditions imposed on the escrow.
- Record the deed and any other documents.
- Request the title insurance policy.
- Close the escrow pursuant to instructions supplied to the seller, buyer, and lender, if any.
- Disburse funds as authorized by the instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.
- Prepare final statement for all parties involved that account for the disposition of all funds held in the escrow account.
How Do I Open An Escrow?
When your offer is accepted, Landmark Properties will open an escrow. As soon as you execute the Purchase Agreement, Landmark will place your initial deposit (earnest money) into an escrow account at the Escrow/Title Company you will be working with.
Written evidence of the deposit is generally included in your copy of the sales contract. The funds will then be deposited in a separate escrow account and processed through your local bank. You will receive a receipt for the funds from the Escrow/Title company.
What Information Will I Have To Provide?
You may be asked to complete a Statement of Identity as part of the paperwork. Because many people have the same name, the Statement of Identity is used to identify the specific person involved in the transaction through such information as date of birth, social security number, etc. This information is strictly confidential.
How Long Is Escrow?
The length of an escrow is determined by the terms of the Purchase Agreement and can range from a few days to several months. The average length of an escrow is usually 30 to 45 days.
When Do I Sign Escrow Instructions ... And Where?
A few days before closing, your Escrow Officer or Realtor will contact you to make the appointment for you to sign your escrow instructions, grant deed and final papers. At this time, your Escrow Officer will also tell you the amount of money you will need to bring in.