This video was produced by First American, one of Title Guaranty’s underwriters, to explain the escrow process.
The dictionary defines escrow as “The deposit of deed, bond, monies, contract or other written agreements with a third person to be delivered or used only upon performance or fulfillment of set conditions.” More simply, escrow may be defined as a stakeholder.
In practice, escrow includes all of the services of a person skilled in the performance of the many details required to quickly and safely close your real estate transaction. The Seller’s title is protected, held in safekeeping until all terms are complete. The Buyers may deposit funds, secure in the knowledge that they will be held in trust until the transfer of the property.
A real estate transaction requires time…time to perform the details of a title search, to prepare documents and obtain financing. During this period, the parties should be protected with a written contract containing all the terms and conditions of the sale.
Escrow provides one central place where all funds and documents may be deposited. Here they can be collected and disbursed only when all conditions of the contract are met.
Escrow is an independent third party who can perform these services impartially, protecting both Buyer and Seller, and acting on their written instructions in dealing with lenders, attorneys, brokers, agents, and any other parties involved in the transfer of the property.