The Purpose of The Escrow

When opening an escrow, the Seller and Buyer of a piece of property establish terms and conditions to facilitate a transfer of ownership of that property. These terms and conditions are given to a third, disinterested party known as the escrow holder. The escrow holder in turn has the responsibility of seeing that the terms of the escrow are carried out. Escrow Instructions Escrow instructions are written documents, signed by both parites , that outline the specific steps to be completed, in order that the escrow can be closed. Once the escrow instructions have been signed, the escrow process has begun. Closing the Escrow Once all the terms and conditions of escrow of both Buyer and Seller have been fulfilled, and all closing conditions satisfied, the escrow can be closed. In many cases, the closing will depend on the instruction by one or the other of the parties which specifically indicates at what point and under what conditions the escrow holder may consider escrow closed. For example, the Seller may instruct that escrow remain open until the purchaser has notified the escrow holder in writing that possession has been taken of the property. When these events have occurred, the escrow officer must complete the closing procedures of recording the documents and settling the accounts. In Summary The escrow process was developed to help you facilitate the sale or purchase of your home. The escrow holder accomplishes this by: * Acting as an impartial “stake holder” * Processing and coordinating the flow of documents and fund * Responding to the lender’s demands * Securing a title insurance policy * Obtaining approvals from parties to the transaction, as needed * Precisely prorating and adjusting any fire insurance, taxes rents or other such items * Recording the Deed and any loan documents The example and explanations contained in this article are based on relatively simple escrows. There are many variations and should you encounter them the escrow officer can explain any differences in the escrow procedures.

Jan.12,06 12:15 PM

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