Escrow is a legal arrangement used to transfer the title to real property. It reduces the risk of fraud by creating a third party that holds the liability of collecting and distributing the funds as per the instructions of the buyers and sellers. The procedure includes delivering of the asset to a third party (usually an escrow agent) to be held in trust for a pending payment. After all the payments are made, the agent delivers the asset to the receipt otherwise maintain the escrow account.
It is opened when both the parties (i.e. seller and buyer) reaches an agreement on price and other terms. The account can stay open for long periods depending on the complexity of the deal.
Role of an escrow agent
- He/she generally acts in the favor of both the parties to ensure that the transaction takes place with few problems and in full satisfaction.
- Ensures all the paperwork is in order.
- Orders a title report from a title company.
- Makes sure all existing loans are paid off and closely examines the deal.
- Prepares proper papers to get the deal closed.
Importance of escrow services
It is basically clearing home for funds and dues to make sure that all the conditions are met prior handling the property to other hands. All the parties in the procedure are legally protected against fraud. It also guarantees that your money is taken well care of.
The fee of the escrow agent is based on the size of the deal. The procedure includes lots of paperwork so it is in your best interest to hire the services of a professional.
Look for the service providers online or in local directories. Make a list of the top five firms and call them one by one. Inquire about their experience, hours of operation, methods of communication they use for clients and the way they will handle the escrow collection account. Also inquire the fees and funding options.
Choose the one with whom you are comfortable working with. Your choice of an escrow officer is an important decision so take it wisely.
For escrow services in Florida, get in touch with All Florida Title. We are a full service title insurance agency having years of experience. Till date, we have closed many deals. For any queries, get in touch with us. You can call us or email us your queries. We will be happy to help you.
After all the searching, your offer has been accepted and you are just close to own a home!!! Hold on! Do you know about escrow?
What is escrow?
It is a legal agreement by which the money, property titles and other securities are kept with a third-party during the transaction. During real estate deeds, the money is placed in an escrow account. The account holds funds that are intended for insurance premiums and real estate taxes that have been paid in advance to use at the later stage.
Relevance of escrow account
It is required prior to closing a real estate deal. Mortgage lenders require an account to make sure all the costs are met during closing. It is because the agent cannot release funds until all the conditions of the sale are fulfilled, both the parties have completed the paperwork and all other matters are settled. The account holder protects everyone’s interest during such transactions.
The role played by the holder
- He/she makes sure all the terms and conditions are met before releasing the funds.
- The professional prepares the instructions, title search and purchases the title insurance.
- He/she also reviews the requirements needed for the transaction to make sure everything ends up well.
- The expert also examines tax, interest and other payments required during the deal.
- When all the instructions are completed, he/she closes the account and necessary paperwork.
- The account holders cannot advise buyers and sellers. Their status is neutral.
Choosing an escrow company- questions to ask
- Know their experience. How long have they been working in the field?
- What are their working hours? If you need, can they stay late?
- How do they handle the account?
- What are their fees?
- What kind of support and co-operation do they expect from you?
Once you are done with the search process, choose an agent that you feel comfortable working with. Your choice of a professional is the most crucial decisions you make as a real estate investor.
It is very relevant to use escrow so that the interest of both the parties is protected. It also protects you against fraud and also guarantees that expenses like property taxes and insurance are made on time. As a home buyer, you will be secured to know that the money is going where it should.
For details on escrow, get in touch with All Florida Title. We will be happy to help you.