What is Escrow?
Why Do I Need An Escrow?
Can I get legal advice from an escrow officer?
If I have questions about my escrow, where can I get answers?
What is Escrow?
Escrow is a way of transferring or exchanging property and/or money using a neutral third party. Escrow is most commonly associated with real estate transactions. 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. When all conditions of the purchase agreement are met, the escrow agent assigns the property title to the purchaser and distributes the funds to the seller.
Why Do I Need An Escrow?
Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
Can I get legal advice from an escrow officer?
An escrow officer is not a legal counselor and cannot give legal advice. The purpose of escrow is to take, and comply with, instructions to carry out the mutual agreement of the buyer and seller. In the event that the either disagree, the escrow officer must remain neutral until an agreement is reached. The escrow officer should never become involved in the negotiation.
If I have questions about my escrow, where can I get answers?
If negotiations have been conducted through a real estate agent or broker, that person should be your primary consultant. The role of an independent agent prohibits the escrow officer from answering many of your questions. However, a knowledgeable escrow officer, whose responsibility is giving impartial service to all parties, will refer you to the proper source for your answers. An escrow officer will often suggest that the customer seek the advice of legal counsel or a tax consultant.