What We Do

What is Escrow?

Buying or selling a home (or some other interest in real property) usually involves the transfer of large sums of money. It is imperative that the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. For the protection of buyer, seller, and lender, the escrow process was developed.

As a buyer or seller, you want to be certain that all conditions of sale have been met before property and money change hands. The technical definition of an escrow is a transaction where one party engaged in the sale, transfer or lease of real or personal property with another person delivers a written instrument, money or other items of value to a neutral third person, called an escrow agent or escrow holder. This third person holds the money or items for disbursement upon the happening of a specified event or events or the performance of a specified condition or conditions.

Simply stated, the escrow holder impartially carries out the written instructions given by the principals. This includes 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 agent 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, any seller-assisted financing, and requests for payment for various services to he paid out of escrow funds.

If the transaction is dependent on arranging new financing, it is the responsibility of the buyer to make the necessary arrangements for application, qualification, etc. Documentation of the new loan agreement must be in the hands of the escrow holder before the transfer of property can take place. A real estate agent may help to identify appropriate lending institutions.

When all the instructions in the escrow have been carried out, the closing can take place. At this time, all outstanding funds are collected and fees,

Title to the property is then transferred under the terms of the escrow instructions and appropriate title insurance is issued.

Payment of funds at the close of escrow must be in a form acceptable to the escrow agent. Usually the escrow agent will require cashiered or wired funds since out-of-town and personal checks can cause days of delay in processing the transaction. The following items represent a typical list of what an escrow agent does and does not do:


  • serve as the neutral “stake holder” and the communications link to all parties in the transaction;
  • prepare escrow instructions;
  • request a preliminary title search or title commitment to determine the present condition of title to the property;
  • request a beneficiary’s statement if debt or obligation is to be taken over by the buyer;
  • comply with lender’s requirements specified in the escrow agreement;
  • receive purchase funds from the buyer;
  • prepare or secure the deeds or other documents related to escrow;
  • prorate taxes, interest, insurance and rents according to instructions;
  • secure releases of all contingencies or other conditions as required by the particular escrow;
  • record deeds and other documents as instructed;
  • request issuance of the title insurance policy;
  • close escrow when all the instructions of buyer and seller have been carried out;
  • disburse funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs;
  • prepare final statements for the parties accounting for the disposition of all funds deposited in escrow. (These are useful in the preparation of tax returns.)


  • offer legal advice;
  • negotiate the transaction;
  • offer investment advice