Closing Escrow: What Does it Really Mean?

Escrow is a written agreement between the seller and buyer of a property. The moment escrow comes into existence, a third party person, known as an escrow holder, comes into existence. An escrow holder is liable for all the activities executed by both the parties for the purpose of closing the escrow within the desired period of time.

An escrow holder acts as an unbiased personal agent for both parties and collects the funds and documents for the smooth transfer of ownership.  An escrow holder is trusted by both the parties, and carries out his job faithfully.

For the successful closing of escrow, the escrow holder strictly follows the instructions of the escrow deed.  If the conditions of escrow are not fulfilled, the seller can ask the escrow holder not to hand over the documents to the buyer.  And, in the same manner, if the buyer’s requirements are not fulfilled, he can also ask the escrow holder to not move the funds.

In some states, attorneys act as the escrow agent or holder.

Closing of Escrow

Closing of escrow can not be completed without the fulfillment of certain conditions. To ensure that both parties are performing according to the guidelines of escrow, the escrow holder inspects the ongoing process on regular intervals.  If there is any lack of performances, by any of the parties, the escrow holder will immediately report this matter to the concerned party, and follow the instructions, as given.

All the expenses related with the escrow are paid by both the parties as decided.  Payment of title insurance, attorney fees, fees for preparing the documents, notary fees, and loan fees are some of such expenses. The payment details are given in the escrow.  All of this is to assure that no disputes arise between the seller and the buyer.

The process of escrow is simple, and can be fulfilled by buyer and seller. But, just because of the nature of activities and involvement of paperwork, keeping an escrow holder is always advisable. Closing of escrow under an escrow holder becomes easy, and all parties involved in the transactions can easily relate their responsibilities with each other to avoid creating extra work, and also to save time.