Escrow is a process that evolved to ensure protection for all parties to a real estate transaction. A "neutral third party" or "stakeholder" was nominated to hold the funds until the purchaser received appropriate assurance that the property had been transferred. An escrow may also be created for other purchases, although it is most commonly used during the transfer of real estate. Today the escrow is overseen by an escrow officer employed by an independent escrow company or title company. All parties are protected because the escrow holder will retain funds and document until all of the instructions are fulled.
An escrow is created when money and/or documents are deposited with the escrow officer. The escrow Officer's authority is strictly governed by written instructions, mutually agreed upon by the parties involved. The instructioins direct the escrow holder to perform duties necessary to complete the transaction.
A few of the tasks which may be required are:
- Receive and deposit earnest money
- Order information for payoff of existing liens
- Calculate and/or prorate taxes, liens, interest, rents and insurance policies
- Make arrangements for title insurance protectioin for the buyer and lender
- Prepare and/or receive documents relating to the escrow
- Request and receive documents relating to the escrow
- Request and receive funidng from new lender when conditions have been satisfied
- Arrange for recordiing of the conveyance documents and any other legal instrucments required totransfer title to the property prusuant to the terms of the purchase agreement
- Close the escrow and disburse funds as agreed upon in the instructions
- Prepare a closing statement for the parties showing disposition of funds
Definition of "Escrow" from Black's Law Dictionary: A writing, deed, money, stock or other property delivered by the grantor, promissor or obligor into the hands of a third person, to be held by the latter until the happening of a contingency or performan of a conditioin, and then by him delivered to the grantee, promissee or obligee. A system of document transfer iin which a deed, bond or funds is delivered to a third person to hold unitil all conditions ina contract are fulfilled.
Fun Fact: Escrow practices evolved from English common law. The word "escrow" is actually dereived from the Middle English (12th to 15th century) word for "scroll", on which all of the escrow instructions and lists of properties were recorded.
ESCROW FLOWCHART
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Lupe Soto, Realtor, REO Agent representing Buyers, CREN Certified RE Negotiator, e-PRO (Se Habla Espanol)
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It's coming. Like it or not, the holiday season is here. We've made it through Halloween, on its heels is Thanksgiving and then with a blink of the eye , we have Hanukkah and Christmas. It always seems that we pack about 3 or 4 months of effort and activities into about 2 months.
•¨ Victorian Tree- decorated with roses, doilies, hydrangeas, red and gold ornaments. The result is a very traditional tree, reminiscent of the Victorian era with a modern twist.
•¨ Retro-modern tree- decorated with "funky" ornaments in turquoise, lime green and dynamic blues.
