Escrow is one of the last stages in the purchase or sale of a real property. When someone says that they are “in escrow”, it means that they have either accepted an offer on the sale of their property, or their offer to purchase has been accepted. The offer to purchase agreement is the instrument that is first signed by all parties before they “go to escrow”. Although an escrow is not always required by law, it is an indispensable process by which an independent, neutral third party handles the legal paperwork of a real estate sale.
The life of a typical escrow in a typical transaction follows these basic steps:
Escrow instructions are prepared along with other pertinent documents, and signatures are obtained.
Title search is ordered, a preliminary title report is received and sent out for review and approval by all parties. Demands for payoff are ordered on existing money liens, and clarification requested on tax liens and other liens. While the escrow officer is processing the file, the lender for the buyer is also processing the loan application. If the buyer is assuming the existing loan, the escrow officer requests a beneficiary statement, forwards to buyer for review and approval, and requests loan documents for transfer or for the new loan.
Once documents are received, the file is “figured” and reviewed to determine that all conditions have been met, and all documents have been properly prepared. Funds are obtained from the buyer, signatures on loan documents are obtained, loan funds are requested and received, and recording is ordered from title company.
All escrow instructions are confidential and disclosure can be authorized by the buyer or seller.
Keep in mind that there are some differences in how the escrow process is handled on the east coast as compared to the west. In addition, there are many other occurrences in the life of an escrow, and each one is unique because it involves totally unique circumstances and individuals in the real property transaction.
Russell J. Montjoy
Exit Deluxe reality
4600 N Park Ave.
Chevy Chase, Md. 20815