Escrow - What It Is and How It Works

THE ESCROW HOLDER DOES:

Serve as the communication link to all parties in the transaction.
Prepare escrow instructions.
Request a preliminary title search to determine the basis upon which a title insurance policy may be issued.
Request a beneficiary's statement or payoff demand relating to existing financing.
Comply with lender's requirements, specified in escrow agreement.
Receive purchase funds from the buyer.
Prepare or secure the deed or other documents related to escrow.
Prorate taxes, interest, insurance, and rents according to instructions.
Secure releases of all contingencies or other conditions as imposed on any other particular escrow.
Records deeds and any other documents as instructed.
Request issuance of the title insurance policy.
Close escrow when all of the instructions of the buyer and seller have been carried out.
Disburse funds as authorized by instructions, including charges for title insurance, recording fees, real estate commission, and loan payoffs.
Prepare final statements for the parties accounting for the disposition of all funds deposited in escrow.

Published by the
California Escrow Association
925 L Street, Suite 390
Sacramento, CA 95814
(916) 325-0600