Escrow 

Whether you are a buyer or a seller, some where in the preparation of making an offer for the purchase of property the term Escrow will come into the conversation.  As an agent, I often just assume that my client knows what "Escrow" means.  But, when I started really to search for a sound definition of that term, I came to realize that it is much more complex than I thought.  The Escrow Institute of California has prepared a prepared a very understandable document that I found on the internet that I want to share with you.  

Escrow:  What is it?

Escrow comes into play when there is a transfer of money and related documents (i.e. deed or other instrument) by one party to another.  These funds are documents are delivered to a neutral third party who is called an escrow agent or escrow holder.  That person holds the money or items for disbursement until the happening of a specified event or the performance of a specific deed.  An escrow is a deposit of funds or documents.  Typically, the funds are an amount that the buyer will deposit with the escrow agent as an indication of the veracity of the offer.  Upon completion of the contract, the amount to be be borrowed will be shown as a deduction from the accepted sale price of the property.

Payment of funds at the time the escrow payment is made is usually done with a personal check or a cashier's check. A cashier's check eliminates the time delay of a personal check which needs to be verified for availability of funds.

Escrow:  Why Do I Need an Escrow?

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 transaction have been followed.  The escrow holder has the responsibility to safeguard the monies or documents until all of the requirements of the contract are met.

Escrow:  How Does It Work?

The parties to the escrow cause written instructions to be created, signed, and delivered to the escrow officer. Assuming that a broker is involved, he will normally provide the escrow officer with the information necessary for the preparation of the instructions and documents.

The escrow officer processes the escrow in accordance with the instructions.  Once the conditions are met, the escrow will be closed. Of course, those conditions vary with each transaction.

The duties of an escrow officer include:  following the instructions given by the principals to the transaction in a timely basis; handling the funds in accordance with the instructions; paying all authorized bills; responding to to authorized requests; and closing the escrow once all conditions are met. The escrow agent will also prepare the final statements for the parties accounting for the disposition of all funds deposited in escrow. 

Escrow:  Who Chooses the Escrow?

The selection of the escrow holder is done by agreement between the principals.  As an agent representing the buyer, I will recommend an escrow holder.  But, it is the right of the principals to use an agent who is competent and experienced in handling escrows.  

Escrow:  What does the Escrow Agent Not Do?

The escrow agent does not: offer legal advice: negotiate the transaction: or offer investment advice.

Any Questions?

Please call me at 314-570-5125 or send an email to: ronaldgorman@me.com.

Ron Gorman, Realtor Coldwell Banker Gundaker St. Louis Office 4320 Hampton Ave  St. Louis, MO  63109 Office: (314) 351-6005 Cell: (314) 570-5125 Fax: (314) 667-3016 Email: info@stlcityhomes.com   Licensed in the State of Missouri