What Escrow Is Not
May 1, 2007
Escrow is a neutral party which follows instructions from principals (buyers and sellers). It is a repository for documents and monies which are held until the terms of the purchase agreement have been satisfied. Once all agreed to terms have been completed, escrow orders the recording of the deed and pays bills and disperses funds as directed.
The escrow holder is not a transaction coordinator. The agent and/or the transaction coordinator are responsible to oversee other terms in the purchase agreement. Such items as the structural pest control inspection and completion of any work required to correct infestations are ordered by the seller, the agent or a transaction coordinator. The physical inspection is ordered by the buyer with the aid of the buyer's agent. Any repairs are negotiated outside of escrow. For any structural pest control work or negotiated repairs, bills may be submited to the escrow holder for payment at close of escrow. Bills submitted must be approved by the party whose funds will be charged.
The escrow holder never sees the property so it is important that the principals and their agents review legal descriptions and title reports. Escrow merely orders these documents based on the information that they have received from the written purchase agreement.
Escrows in California are vital to the processing of purchase agreements. Understanding who is responsible for carrying out each term of a purchase agreement will insure that last minute panics can be avoided.
Tomorrow: I will respond to some comments and questions from readers.
Escrow is a neutral party which follows instructions from principals (buyers and sellers). It is a repository for documents and monies which are held until the terms of the purchase agreement have been satisfied. Once all agreed to terms have been completed, escrow orders the recording of the deed and pays bills and disperses funds as directed.
The escrow holder is not a transaction coordinator. The agent and/or the transaction coordinator are responsible to oversee other terms in the purchase agreement. Such items as the structural pest control inspection and completion of any work required to correct infestations are ordered by the seller, the agent or a transaction coordinator. The physical inspection is ordered by the buyer with the aid of the buyer's agent. Any repairs are negotiated outside of escrow. For any structural pest control work or negotiated repairs, bills may be submited to the escrow holder for payment at close of escrow. Bills submitted must be approved by the party whose funds will be charged.
The escrow holder never sees the property so it is important that the principals and their agents review legal descriptions and title reports. Escrow merely orders these documents based on the information that they have received from the written purchase agreement.
Escrows in California are vital to the processing of purchase agreements. Understanding who is responsible for carrying out each term of a purchase agreement will insure that last minute panics can be avoided.
Tomorrow: I will respond to some comments and questions from readers.
posted by shirley harry at 8:14 AM
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