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Transactions involving real estate often must have numerous events take place, including the transfer of large sums of money. As buyer, seller or lender, you want to be certain that all conditions of the transaction have been met prior to real property and/ or money exchanging hands.
The escrow holder impartially carries out the written escrow instructions given by the principals. This includes receiving funds and documents necessary to comply with the above instructions.
Escrow must be provided the necessary information to close the transaction. This includes receiving funds and documents, property tax statements, fire and other insurance policies
, purchase and sale agreement and requests for payment for various services to be paid out if escrow funds.
When all the instructions in escrow have been complied with, the closing can take place. At this point, all funds needed for the transaction are in escrow. Title to the property is transferred under the terms of the escrow instructions and the appropriate title insurance is issued. Lastly, funds in escrow are disbursed - old loans are paid off, all fees and charges are paid such as new loan fees, real estate commission, title insurance premiums and termite work.
Below is typical of what the escrow officer does:
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Serves as the neutral 'Stakeholder" and the communications link to all parties in the transaction.
- Prepares escrow instructions.
- Requests a title commitment to determine the present condition of title to the property.
- Request a loan payoff statement if loans secured by the property are to be paid off.
- Request a beneficiary's statement if an existing loan secured by the property is to be taken over by the buyer.
- Complies with the new owners instructions.
- Receives purchase funds from the buyer.
- Prepares real estate related documents as authorized by the Limited Practice Board of Washington.
- Pro-rates taxes, interest, insurance and rents per escrow instructions.
- Records deeds and any other documents as instructed.
- Requests issuance of the title insurance policy.
- Closes escrow when all escrow instructions from principals have been carried out.
- Disburses funds from escrow - recording fees, loan fees, commissions, and loan payoffs.
- Prepares final closing statement accounting for all funds deposited to escrow.
The escrow officer does not:
- Offer legal or tax advice.
- Negotiate the transaction.
- Offer investment advice.
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