Robyn Seymour - Escrow Process in Real Estate Transactions

One of the final stages in the process of buying or selling a real estate property is the Escrow. When someone says that they are "in escrow", it means that they have either accepted an offer on the sale of their property, or their offer to purchase has been accepted. The offer to purchase agreement is the instrument that is first signed by all parties before they “go to escrow”. Although an escrow is not always required by law, it is an indispensable process by which an independent, neutral third party handles the legal paperwork of a real estate sale.

The life of a typical escrow in a typical transaction follows these basic steps:

Escrow instructions are prepared along with other pertinent documents, and signatures are obtained. Title search is ordered; a preliminary title report is received and sent out for review and approval by all parties. Demands for payoff are ordered on existing money liens, and clarification requested on tax liens and other liens. While the escrow officer is processing the file, the lender for the buyer is also processing the loan application. If the buyer is assuming the existing loan, the escrow officer requests a beneficiary statement, forwards to buyer for review and approval, and requests loan documents for transfer or for the new loan.

Once documents are received, the file is “figured” and reviewed to determine that all conditions have been met, and all documents have been properly prepared. Funds are obtained from the buyer, signatures on loan documents are obtained, loan funds are requested and received, and recording is ordered from Title Company. All escrow instructions are confidential and disclosure can be authorized by the buyer or seller. Keep in mind that there are some differences in how the escrow process is handled on the east coast as compared to the west. Many other occurrences in the life of an escrow is about to happen and each one is unique based on the circumstances and individuals in the real estate property transaction process.