The depositing of funds and documents by the parties with a neutral third party for delivery upon completion of the terms of the escrow instruction.
When the parties deliver documents and money to the Escrow Officer to be held for further delivery until certain conditions have been met, we say the documents are held “in escrow,” or that the parties have “opened an escrow.” Each of the principals of the escrow (Seller, Buyer, Lender) will give the escrow holder written instructions setting out the conditions under which further delivery is to be made. These instructions are usually prepared by the Escrow Officer of the Escrow Assistant.
Customer opens the order at the preferred Title Company
Order preliminary report or commitment from the title department
Receive demands and/or beneficiary statement, request clarification of liens
Forward bills from Termite Company, homeowner’s insurance company and home warranty company to the Escrow Officer at the direction of the customer
Loan documents received from Lender
Prepare Escrow instructions and pertinent documents
Review file to determine all conditions have been met and all documents are correct and available for signature.(i.e., termite inspection, contingencies released, homeowner’s insurance ordered, etc.)
Confirm all seller paperwork is in order
Confirm all buyer paperwork is in order
Configure file, request signatures on all remaining docs
Obtain closing funds from buyer
Request loan funds from Lender
Forward documents to recording desk
Loan funds received and deposited
Close file, prepare final statements and disperse funds
Complete closing and forward final documents to all parties
Main TAKEAWAYS KEY
The third party shall keep the funds until they meet their contractual requirements.
Escrow consists of the use of an asset or funds by a third party before translation takes place.
It can also refer to all situations in which funds are exchanged between one party and another for property transactions.