The escrow process can be a complicated and often technical necessity of buying and selling real estate.  The escrow company and its officer have many duties to juggle on behalf of the Realtor, Seller, and Buyer during the real estate transaction.  Understanding the various duties and functions of the escrow can assist all parties in ensuring a successful and timely transaction, as everyone involved has a part to play.

The escrow officer’s main duty is to remain as a neutral third party between buyer and seller in a real estate purchase transaction at all times.  The escrow officer is not to be involved in negotiations between buyer, seller and/or lender.

Additional escrow officer duties and responsibilities are as follows:

1.   Receive and hold buyer’s funds in a non interest paying trust account during escrow

2.   Read and comply with all agreements as detailed in the Purchase Contract and Joint Escrow Instructions as it pertains to the escrow process

3.   Follow mutually signed, written instructions agreed upon by buyer and seller during escrow

4.   Prepare Escrow Instructions/General Provisions, Amendments, Grant Deed (for seller’s signature), Estimated Closing Statement and any additional documents required to clear title or as required by the new lender

5.  Although in many cases reports are ordered by the buyer, seller or agents outside of escrow in some cases the escrow officer will obtain reports as required by the purchase contract and provide same to the buyer during escrow for their review

6.   Make sure escrow is in receipt of buyer and seller signatures on Purchase Agreement and Joint Escrow Instructions, Escrow Instructions/General Provisions, Grant Deed, any Amendments, Estimated Closing Statements and any other documents required during escrow

7.  Receive loan documents from the buyer’s new lender (IF APPLICABLE) and prepare amendments and estimated closing statements as required by the lender on their lender’s instructions

8.  Order the evidence of insurance from the buyer insurance agent as per the requirement of the new lender

9.  Send the signed loan documents and all lender required items to the new lender for funding

10.  Send original recordable documents along with any releases required to clear title to the title company for recording at the close of escrow

11.  Make sure that escrow is in receipt of all funds necessary to pay the seller their proceeds as well as all invoices agreed upon by buyer and seller during escrow

12.  Make sure the seller has sufficient equity in the property to cover all costs, payoff of liens and any invoices agreed upon by buyer and seller during the escrow

13.  Make sure that all the proper paperwork is in escrow to provide the buyer with clear title to the property

14.  Make sure that all the conditions agreed upon by the buyer and seller on the purchase agreement and in writing through escrow have been satisfied prior to closing the escrow and transferring the property into the buyer’s name

The Buyer and Seller should also be aware that they will be receiving many additional items that may require their signatures from their agents and lenders directly.

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  1. Dena | February 22nd, 2011

    Who chooses the escrow office? We just put an offer on a house and we choose our escrow we had just purchased a house 3 months ago. The Seller or realtor is sending a counter to use her escrow company on an all cash deal. Is she crazy?
    She says seller is firm……………….

  2. jgeiszler | February 23rd, 2011

    Hi Dena,

    Thank you for your comment. Typically, the buyer does have a choice when selecting an escrow company; however, it is negotiable and must be mutually agreed upon by both the buyer and seller. Often times, when the seller counters to use his or her escrow company, they may agree to cover other fees. We discussed this issue in a previous article titled The Buyer’s Choice Act, which you might find helpful:

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