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An escrow is an arrangement on which a neutral third party,
called an escrow holder, holds legal documentation and funds
on behalf of a buyer and seller. The escrow agent works
closely with you, your realtor and lender to assure that the
sale conditions are complied within the time period called for
in the Residential Purchase Agreement and Joint Escrow
Instructions. After all parties have executed these documents,
escrow prepares an Addendum to the Residential Purchase
Agreement and Joint Escrow Instructions. Escrow then
distributes them according to the buyers and sellers
instructions. Both the buyer and the seller rely on the escrow
holder to carry out faithfully their mutually consistent
instructions relating to the transaction. Escrow holder is
bound by law to notify both parties if the instructions given
are not mutually consistent or cannot be carried out. These
instructions are drawn by the Escrow Officer, and signed by
the buyer and seller. Since the escrow instructions are not as
detailed as the Purchase Contract, the information contained
in the instructions is intended to direct the Escrow Officer
in the specific steps that are to be completed through the
escrow instruction.
What
happens during escrow?
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