What is an Escrow?
An escrow is a process wherein the Buyer and Seller deposit written instructions, documents, and funds with a neutral third party until certain conditions are fulfilled. In a real estate transaction, the Buyer does not pay the Seller directly for the property. The Buyer gives the funds to an escrow company who, acting as an intermediary, verifies that title to the property is clear and all written instructions in the contract have been met. The company then transfers the ownership of the property to the Buyer through recordation and pays the Seller. This process protects all parties involved. States license and regulate all title and escrow companies. The governing state departments can inspect a company’s records at any time, providing further oversight of the company’s management and position as an impartial third party to the transaction. The stability, reliability, and performance of your title and escrow company are vital to protect the interests of all parties to the transaction.