Escrow is a process that provides for a fair and equitable transfer of property from one person to another.

When parties deliver documents and money to an Escrow Officer (to be held for further delivery until certain conditions have been met), we say the documents are held "in escrow."  We may also say the parties have "opened an escrow."  Each of the principals (seller, buyer, lender) of the escrow will give the escrow holder written instructions setting forth the conditions under which further delivery is to be made.  These instructions are usually typed by the Escrow Officer or Escrow Assistant from oral information supplied by the principals or from a contract signed before they arrive at the escrow office.

The Purpose of an Escrow
The common use of an escrow is to enable the parties in a real estate transaction to deal with other with less risk since the escrow holder acts as:

• Custodian for funds and documents
• A clearing house for payment of all demands
• An agency to perform the clerical details for the settlement of the accounts between the parties

• Open an Escrow -
  • Once an offer is accepted, escrow is opened with a title company
  • Earnest money is deposited at this time
  • Escrow orders a Preliminary Report and sends copies to your agent and lender
  • Escrow instructions issued to all parities along with an opening package
• Contingency Period
  • Buyer receives and approves Seller's Real Estate Transfer Disclosure Statement
  • Buyer approves Preliminary Report
  • Physical inspections/pest inspections are completed
  • Property appraisal and loan approval are in progress
• Homeowners Insurance Coverage
  • Buyers obtain a Homeowners Insurance Policy for their new home and the insurance information is given to escrow
  • Escrow orders a copy of the homeowners' insurance policy for the new lender prior to escrow closing
• Signing Documents at the Title Company
  • Buyers need to bring current photo identification to sign notarized loan documents at the title company
  • Copies of the title and lender documents are given to buyers
• Down Payment and Closing Funds
  • The Escrow Officer provides you with a Buyer's Estimated Closing Statement which itemizes your costs and advises you of total monies due
  • Buyer brings a cashier's check to the title company several days prior to closing
• Funding
  • The lenders sends funds to the title company
• Close of Escrow
  • The deed is recorded at the County Recorder's office by the title company (buyer will receive the original back from the County Recorder)
  • Keys are transferred from seller to buyer
  • HUD-1 is generated and should be kept by Buyer and Seller for tax purposes