Escrow Companies are an independent 3rd party to a transaction that essentially oversees and monitors the contractual agreement. They also hold the funds in an independent Escrow Trust Account and disburse the funds upon a successful close of escrow based upon the instructions provided. Escrow provides a level of safety to all parties involved and ensures that all parties perform their obligations under a Purchase and Sale Agreement.
How do you find an escrow officer?
In some states, your attorneys act as escrow officers. In other states, you work with 3rd party escrow companies. In those states, escrow officers can be found a number of ways, most often they are referred by word of mouth and recommended by the real estate agents or mortgage brokers in the transaction.
How do you choose the right escrow officer for you?
The “right” escrow officer is typically one that does business the same way as you do. For example if you like to correspond and receive documents by email you will want to ensure your escrow officer is proficient at email. If you want your officer to be available on weekends or after hours you will want to be sure to your officer is available by cell phone and is accommodating to your schedule.
Are there any escrow caveats, or anything people should be on the look out for?
If you are a buyer, during the escrow process it is important to diligently work on any financing you are obtaining to purchase the property and to return any paperwork sent to you in a timely manner. Delays can be very costly and could also possibly cost you the deal and your deposit! If you are a seller, you will want to be sure that you complete, sign and notarize everything as soon as possible and return your package to the escrow officer so that any issues can be cleared up well in time to close. For any party, it is highly recommended that you request an estimated closing statement as early as possible so that you know the fees up front, can ask any questions and be prepared for the final closing.
What should buyers and sellers have to be prepared to open and more importantly close escrow?
To open escrow – a mutually agreed to and executed Purchase Agreement and typically a good faith deposit (typically 3% of the sales price) are required. To close escrow – all signed escrow documents, removal of contingencies, any applicable financing and the balance of the down payment are required.