Frequently Asked Questions

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 An escrow is a deposit of funds, a deed or other instrument by one party  for the delivery to another party upon completion of a particular  condition or event.  Escrow is a way of transferring or exchanging  property and/or money using a neutral third party.  Escrow includes  depositing (with a neutral third party) funds, documents, and the  instructions essential to complete the transfer.  The California Escrow  Law:  Section 17003 of the Financial Code:  provides the legal  definition. 

 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. 

 When you put money in escrow it is held by a neutral third party (the  escrow offer). The escrow officer works for both the lender and the  borrower.  The agent's function is to execute the instructions agreed  upon by both parties.  The funds will then be released after all the  terms of the agreement have been met.  Each escrow, although following a  parallel pattern, will be different in some respects, since it deals  with your property and the specific transaction at hand.

The duties of an escrow holder consist of:  following the  instructions given by the principals and parties to the transaction in a  timely manner; handling the funds and/or documents in accordance with  the instructions; paying all bills as authorized; responding to  authorized requests from the principals; closing the escrow only when  all terms funds in accordance with instructions and provide an  accounting for same: the Closing or Settlement Statement. 

 Depending on the rules of the state it will either be the buyer or the  seller who chooses the escrow company.  The selection of the escrow  holder is normally done by agreement between the principals. If a real  estate broker is involved in the transaction, the broker may recommend  an escrow holder. However, it is the right of the principals to use an  escrow holder who is competent and who is experienced in handling the  type of escrow at hand. There are laws that prohibit the payment of  referral fees; this affords the consumer the best possible escrow  services without any compromise caused by a person receiving a referral  fee. 

 It depends upon the inspection period agreed upon by both parties, the  buyer's payment method, delivery time from seller to buyer, and the  seller's selected disbursement option.  Generally, most escrow purchases  can take from 5 to 20 days. 

 The dispute mechanism is negotiated among the escrow agent and  responsible parties for inclusion in the escrow agreement prior to  execution. Typically, in the event of a dispute, the escrow agent holds  the escrow (funds, property, etc.) until receipt of a final court order,  arbitration award or joint written instructions directing the escrow  agent to disburse funds from the escrow account.