• What is Escrow

    Escrow is a service which provides the public with a means of protection in the handling of funds and/or documents. Escrow enables the buyer and the seller to transact business with each other through a neutral party, thereby minimizing their risk.

    During the escrow, all parties involved give their instructions to this neutral intermediary, the “escrow holder” whose duty it is to assure that no funds or property will change hands until all instructions have been carried to completion. In the ever increasing complexity of business, law and tax structures, it takes a trained professional to supervise the transaction.

    What does the Escrow Officer do?
    The Escrow Officer will:

    • serve as the communication link to all parties in the transaction.
    • prepare escrow instructions.
    • request a preliminary title search to determine the basis upon which a title insurance policy may be issued.
    • request a beneficiary’s statement or pay-off demand relating to existing financing.
    • comply with lender’s requirements, specified in escrow agreement.
    • receive purchase funds from the buyer.
    • prepare and secure the deed or other documents related to escrow.
    • prorate taxes, interest, insurance and rents according to instructions, as applicable
    • secure releases of all contingencies or other conditions as imposed on any particular escrow.
    • record deeds and any other documents as instructed.
    • request issuance of the title insurance policy.
    • close escrow when all of the instructions of buyer and seller have been carried out.
    • disburse funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.
    • prepare final statements for the parties accounting for the disposition of all funds deposited in escrow.

    The Escrow Officer does not:

    • offer legal advice.
    • negotiate the transaction.
    • offer investment advice.
  • Escrow Company Comparison

    A licensed escrow company is the best possible neutral third party to complete your real estate transaction. Whether searching for an escrow holder yourself, or looking to recommend one to a client, a licensed escrow company gives you peace of mind.

    All escrow companies in California can be classified into two basic categories: Licensed or Controlled.

    • Licensed escrow companies are independent businesses licensed by the California Department of Business Oversight. This license regulates the procedures and practices of the companies and subjects with stringent requirements designed to protect consumers.
    • Controlled escrow companies are non-licensed businesses that can be owned by a variety of entities, including real estate brokers, mortgage brokers, banks, savings and loans, and title insurance companies. Such companies fall under the jurisdiction of a variety of supervising agencies, with regulations and requirements that vary widely.

    None of the agencies have regulations as strict as those imposed on the escrow companies licensed by the Department of Business Oversight. These stringent requirements assure that every licensed escrow company meet the highest standards in the industry. Consumer protection regulations unique to licensed escrow companies include:

    • A Certification Program for all escrow officers in the company’s employ, including fingerprinting and background checks by the Department of Justice;
    • A requirement that an escrow officer with at least five years experience be on-site;
    • Financial stability requirements, including at minimum one CPA audit a year; and, frequent surprise examinations conducted by the Department of Business Oversight;
    • Prohibiting employment of convicted felons or anyone who has been disbarred from the real estate industry;
    • Membership with the Escrow Agents’ Fidelity Corporation which provides a $5 million fidelity bond;
    • Company’s sole business is doing escrow, which requires a higher level of state regulatory requirements and oversight.
  • Government Offices