Escrow Know-How: An Escrow is an arrangement in which an impartial “third party”, called an escrow holder (generally the Escrow Officer), holds legal documents and money on behalf of a buyer and a seller, and distributes them according to the buyer’s and seller’s mutual instructions.
- Only the principals to the transaction are entitled to the information concerning the escrow.
- The term “escrow” has come to mean “neutral protection” for the seller, and the buyer.
- All parties involved in the transfer of real property are supposed to be impartially protected during the transaction.
Who can do an escrow: The escrow holder may be any disinterested third party, yet not all escrow companies are all the same.
- Some maybe licensed by the state and others may not.
- Depending on the laws of your state, the guidelines/regulations can differ, and some may afford consumers more protection than others.
Escrow officers with established firms generally are experienced and trained in real estate working directly with the buyer’s lender for the new loan if applicable, in addition co-ordinating with the title insurance company for seller payoff compliance, homeowner associations, etc. etc.
It’s also important to note that the escrow company/escrow officer while wanting you to place nice in the playground, they do not make buyer/seller decisions for you, this may be contrary to the belief of consumers.