Madrona Park Escrow, Inc

Very simply defined, an escrow is a deposit of funds – a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law – Section 17003 of the Finance Code – provides the legal definition.

Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until all of the instructions in the transaction have been followed. The escrow holder has an obligation to safeguard the funds and/or documents while they are in possession of the escrow holder and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

The principals to the escrow – buyer, seller, lender and borrower – cause escrow instructions, usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, he or she will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.

The escrow officer will process the escrow in accordance with the escrow instructions and, when all conditions required in the escrow can be met or achieved, the escrow will be “closed.” Each escrow, although following a similar pattern, is different in some respects as it deals with your property and the transaction at hand.

The duties of an escrow holder include following the instructions given by the principals and parties to the transaction in a timely manner, handling the funds and/or documents in accordance with instruction, paying all bills as authorized, responding to authorized requests from the principals, closing the escrow only when all terms and conditions have been met and distributing the funds in accordance with instructions and provide an accounting for same – the closing or settlement statement.

The selection of the escrow holder is normally done by agreement between the principals. If a real estate broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and experienced in handling the type of escrow at hand. There are laws that prohibit the payment of referral fees, which affords the consumer the best possible escrow services without any compromise caused by a person receiving a referral fee.

The key to any transaction as important as your sale, purchase or loan is to read and understand your escrow instructions. If you do not understand them, you should ask your escrow officer to explain the instructions.

Your escrow officer is not an attorney and cannot practice law. Therefore, you should consult your lawyer for legal advice. Do not expect your escrow officer to advise you as to whether or not you have a “good deal or are doing things the right way. The escrow officer is there to follow the instructions given by the principals in the escrow only.

To expedite the closing of the escrow, you should check with your escrow officer as to what specific items you could do to assist. One question to ask is “What can I do to expedite the closing of this escrow?”

Respond quickly to all correspondence as this will assist in the timely closing of the transaction.

If you are required to deliver funds into the escrow, make sure that you provide “good” funds in the form required by the escrow officer. Company procedures differ in this regard, and there are ways that you can help at the time of closing, so verify this with your escrow officer. Do not give the escrow officer a personal check and expect the escrow to close immediately. The escrow can only close on cleared funds, and the processing of a personal check can take days, possibly even a week or more.

When the escrow officer closes the escrow, some of you may want the closing papers, checks, title policies, statement and so on made available immediately. There are many aspects to the closing of the escrow, and some of these cannot be processed on the day of the closing. Instead, they may take several days. If you have a special need – for example, a cashier’s check on the day of closing – you should communicate that need to the escrow officer early in the processing of the escrow.

“If you are obtaining a new loan, your escrow officer will be in touch with the lender who will need copies of the escrow instructions, the preliminary title report and any other necessary documents related to escrow. In the processing and closing of the escrow, the escrow holder is obligated to comply with the lender’s instructions.

It has become a practice of lenders to forward their loan documents to escrow for signing. You should be aware that these papers are lender’s documents and cannot be explained or interpreted by the escrow officer. You have the option of requesting a representative from the lender’s office to be present for explanation.