WHAT IS ESCROW?

Escrow is an arrangement in which a neutral third party, the escrow closer, assembles and processes all of the components of a real estate transaction (including legal documents), records the transaction, and ultimately, disburses funds according to the buyer’s and seller’s instructions (purchase & sale agreement). The typical responsibilities in the escrow process are listed below.

The Seller & Their Agent:

• Delivers a fully executed Purchase and Sale Agreement (PSA) to the escrow agent.

• Provides evidence to meet the buyer’s conditions of sale, such as proof of repair work and inspections.

• Submits other documents such as tax receipts, mortgage information, insurance policies, and warranties.

The Buyer & Their Agent:

• Deposits funds required to close with the escrow agent.

• Approves any inspection reports, commitment for title insurance, or other items as called for by the PSA.

• Fulfills any other conditions specified in the escrow instructions.

The Lender (when applicable):

• Prepares the Closing Disclosure for the buyers.

• Deposits proceeds of the loan.

• Directs the escrow agent of the conditions under which the loan funds may be used.

The Title Company (Fidelity National Title):

• Receives a request for title service.

• Examines the title to the real property and issues a title report (commitment to title insurance).

• Determines the requirements and documents needed to complete the transaction and advises the escrow closer and/or real estate agents.

• Reviews and approves the releases, signed documents and order for title insurance prior to the closing date.

• When authorized by the escrow closer, records the signed documents with the county recorder’s office and prepares to issue the final title insurance policies.

The Escrow Closer:

• Obtains/Orders title insurance.

• Obtains approvals from the buyer(s) on the commitment for title insurance and any inspections that are called for in the Purchase & Sale Agreement.

• Keeps all parties informed of progress to the escrow.

• Obtains any required payoffs/release documents to clear title.

• Receives funds from the buyer and/or lender.

• In most cases, prepares vesting document and excise tax affidavit on seller’s behalf.

• Prorates insurance, taxes, rents, etc.

• Prepares a final statement for each party, indicating amounts paid in conjunction with the closing of the transaction.

• Responds to lenders requirements.

• Oversees the signing of the loan documents.

• Forwards deed to the county for recording.

• Once the proper documents have been recorded, the escrow agent will disburse and distribute funds to the proper parties.

• Prepare a final statement outlining funds received and disbursed in conjunction with the transaction.

For questions about the escrow process, please contact us directly.