Buying or selling a piece of real estate usually involves the transfer of large sums of money. It is important that the transfer of these funds and related documents from one party to another be handled in a secure, professional and knowledgeable manner. 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. The escrow process was developed for the protection of buyer, seller and lender.
Essentially, the escrow holder is an impartial third party that carries out the written instructions given by the principals. These duties include receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms and handling final delivery of all items to the proper parties upon the successful completion of the escrow.
The escrow must be provided with the necessary information to close the transaction. This may include loan documents, tax statements, fire and other insurance policies, title insurance policies, terms of sale and any seller-assisted financing, and requests for payment for various services to be paid out of escrow funds.
Mortgage lenders require borrower escrow accounts in order to minimize the risk that you fall short of your financial obligations as a homeowner. In a foreclosure, unpaid taxes or insurance can result in liens that make it harder for the mortgage lender to recover the original loan. This creates a strong incentive for lenders to keep their borrowers on track with escrow accounts that smooth out the non-mortgage costs of owning a home.
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.
Payment of funds at the close of escrow should be in the form acceptable to the escrow, since out-of-town and personal checks can cause days of delay in processing the transaction.
WHAT DOES THE ESCROW HOLDER DO:
- Serves as the neutral “stakeholder” and the communications link to all parties
- Prepares escrow instructions
- Requests a preliminary title search to determine the present condition of title to the property
- Requests a beneficiary’s statement if debt or obligation is to be taken over by the buyer
- Complies with lender’s requirements as specified in the escrow agreement
- Receives purchase funds from the buyer
- Prepares or secures the deed or other documents related to escrow
- Prorates taxes, interest, insurance and rents according to instructions
- Secures releases of all contingencies or other conditions as imposed on any particular escrow
- Records deeds and any other documents as instructed
- Requests issuance of the title insurance policy
- Closes escrow when all the instructions of buyer and seller have been carried out
- Disburses funds as authorized by instructions
- Prepares final statements for the parties
WHAT DOES THE ESCROW HOLDER DOES NOT DO:
- Offer legal advice
- Negotiate the transaction
- Offer investment advice
WHY CHOOSE CITRUS HERITAGE ESCROW?
When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.
Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200