What is Escrow and Why Use An Independent Escrow Company

Escrow is a service which provides the parties of a real estate transaction a means of protection in the handling of funds and documents. Escrow is a neutral third party that the buyer and seller can transact business through thereby minimizing their risk.

All parties to the escrow give their instructions to this neutral party, the “escrow holder”. It is their duty to assure that no funds or property will change hands until all instructions have been completed. Once all instructions have been completed and all funds have been placed in escrow it is the duty of the escrow officer to have the legal documents recorded and then close out the file and disburse the funds according to instruction.

Escrow officers are not only expert in the complexities of closing a real estate transaction, they are also accustomed to dealing with the public and working closely with real estate agents, lenders, and other service providers involved in each transaction. Most escrow officers served an extended “apprenticeship” for several years before being promoted to escrow officer. An escrow officer likely has many years experience and has closed thousands of escrows – each one individual and unique.

This responsibility to protect the consumers interest should not be taken lightly. It is important to select someone you trust to safeguard your funds and ensure a seamless closure to your transaction. This is where using an independent escrow company is your best choice.

Independent escrow companies are governed by the Dept of Corporations which regulates the procedures and practices of the companies. They are subject to stringent requirements designed to protect consumers.  These requirements by the Department of Corporations assure that every licensed escrow company has met the highest standards in the industry.

These protection regulations unique to Independent escrow companies include:

• A requirement that an escrow officer with at least 5 years experience always be on site.
• Membership with the Escrow Agents Fidelity Corporation which provides a $5 million fidelity bond Company’s sole business is escrow which requires a higher level of state regulatory requirements and oversight.
• A certification program for all escrow officers in the employ of the company including fingerprinting and background checks by the Dept of Corporations Financial stability requirement, including a minimum of (1) cpa audit a year and surprise examinations conducted by the Dept of Corporations.

 

BETTER PROTECTION, HIGHER STANDARDS AND BONDING ARE ALL VERY IMPORTANT REASONS TO GO WITH AN INDEPENDENT ESCROW COMPANY