An escrow is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions.
An escrow officer must remain completely impartial throughout the entire process. He or she will normally adopt a courteous but rather formal manner when dealing with parties to the escrow, keeping conversation to the matters at hand in the escrow. This formal behavior is meant for the benefit of all concerned, since the escrow officer must follow the instructions of both parties without bias.
The Birth
Receive purchase and sale agreement and/or loan setup.
Assign an escrow officer and escrow number.
Order a preliminary report.
Search and Review
Review purchase and sale agreement.
Review preliminary report.
Contract parties for needed information.
Hunt and Gather
Obtain payoffs on liens/bills to be paid through Escrow.
Obtain title clearing documents.
Receive loan documents from Lender.
Prepare settlement statement and documents.
Signing Ceremony
Set appointment with parties.
Parties deposit documents and/or funds into Escrow.
The Race
Loan documents returned to the Lender.
Recorable documents sent to Title.
Lender authorizes recording.
Title sends documents to county recorder.
Lender deposits loan proceeds.
Disbursements
All encumbrances and bills paid.
Proceeds delivered to seller.
Commission checks delivered to agents.
Mortgage Broker check delivered.
Home Stretch
Final copies to all parties.
Record reconveyances and releases.
Title policies to the parties.
In Summary
The escrow holder is responsible for:
Acting as the impartial "stakeholder" or depository of documents and funds.
Processing and coordinating the flow of documents and funds.
Keeping all parties informed of progress on the escrow.
Responding to the Lender's requirements.
Securing a title insurance policy.
Obtaining approvals of reports and documents from parties as required.
Prorating and adjusting insurance, taxes, rents etc.
Recording the deed and loan documents.
Maintaining security and accountability of monies owed and owing.
