WHAT IS AN ESCROW AGENT?
An escrow officer (also known as an escrow manager or an escrow agent) is a professional who acts as a third party during real estate closings and transactions. They do not work for the buyer or the seller of the property and must remain impartial to ensure that transactions are handled fairly and legally. If the closing is successful, the escrow officer will also approve and handle the disbursement of all involved funds.
WHAT DOES AN ESCROW AGENT DO?
Escrow officers essentially close real estate transactions, but they also handle funds that have been deposited, monitor the status of earnings on those escrow funds to make sure they are returned to the party who deposited the monies and review contracts and titles to ensure proper filings with local assessors and county records officers. An escrow officer is the person who performs the final steps in property acquisition.
Escrow officers typically work for title companies, mortgage lenders or credit unions. During a home’s closing process the escrow officer is responsible for processing any necessary paperwork, witnessing the document signings and explaining the companies’ services to prospective home buyers. The primary function of the escrow officer, however, is to establish escrow accounts for home buyers and to maintain the funds and records of such accounts. Because of the nature of escrow proceedings, many officers have knowledge of both finance and real estate.
Step 1: Fulfill Education Requirements
While there is no formal degree requirement for becoming an escrow agent, many escrow officer or agent positions have a high school diploma as a minimum educational requirement. If you are an adult and you do not have a high school diploma, you can earn an equivalency diploma like a GED. The GED exam can be challenging and requires serious preparation, but many community colleges and other adult education institutions offer comprehensive GED study programs.
If you would like to obtain a college degree, a major in finance, accounting or business management would be ideal for a career as an escrow officer. Other options include enrolling in a certificate program or training through professional organizations, such as the American Escrow Association (AEA). The AEA offers many courses, conferences and seminars to educate potential escrow agents. These introductory classes give students an introduction to the basic duties of an escrow agent. These may include instruction on how to conduct title searches, prepare final paperwork and formally witness the signing of all required legal documents.
Step 2: Learn Relevant On-the-Job Skills
Most employers look for escrow agents with some experience working in the field. An internship or entry-level admin job, such as a receptionist or an escrow assistant, at a title insurance company or real estate office can also help an aspiring escrow agent develop basic skills and see what really goes on in this position. Receptionists typically answer phones and complete clerical duties. Escrow assistants work under supervision to review preliminary reports, gain information for escrow agreements, open title agreements, manage closing files and handle any issues that may arise after closing.
As an escrow officer, it is imperative that you know how to use industry and office software and how to communicate with customers and co-workers effectively. If you have never worked in an office setting before, a clerical training course can introduce you to common office tasks and equipment.
Step 3: Satisfy All Eligibility/Licensing Requirements
Most states require escrow agents to be licensed. The rules and regulations regarding licensing prerequisites and license renewals vary from state-to-state. Typically the licensing process involves passing an escrow officer or agent licensing examination and submitting a state-mandated licensing fee.
All escrow agents performing escrow services in California are either “licensed” or “controlled” escrow companies. A licensed escrow company (also known as in independent escrow company) is licensed by the Department of Business Oversight.
Step 4: Obtain a Position as an Escrow Agent
After gaining some experience in the escrow field and becoming licensed, you can begin looking for a job as an escrow agent. Escrow agents may work in a variety of industries, including real estate, bank loans and bulk sales. These agents will perform routine duties such as preparing escrow instructions, receiving and reviewing preliminary reports, opening the title order, calculating estimated closing costs, preparing settlement statements, disbursing funds and making sure that the transaction complies with state and federal regulations. After working for a company for a period of time, some escrow agents open their own agencies.
Step 5: Move Your Career Ahead With Certification
Obtaining certification demonstrates professional expertise and makes you a more valuable employee. Voluntary certification is available through varying organizations, including the American Escrow Association, state-run escrow associations and some title companies. The prerequisites for becoming certified vary depending on the rules of the certifying organization. Typically, the certification candidate must have some recent escrow experience and pass a certification test.
Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200