When you enter the real estate market for the first time, you might hear some unfamiliar terms. For instance, you’ve probably heard escrow mentioned before, but maybe you’re not sure just what an escrow agent has to do with buying a home. If that’s the case, here’s a quick look at some escrow agent duties to help clarify the process.
What are Escrow Agreements and Escrow Agents?
Plain and simple, an escrow agreement is a legal contract that is overseen by a neutral party. This impartial third party is responsible for holding assets on behalf of both individuals until they complete the terms of a financial agreement. The main goal of an escrow agreement is to secure an honest transaction.
A licensed escrow agent has a fiduciary responsibility to act in the best interest of his or her clients and is bound to remain impartial. Escrow agents are commonly associated with real estate transactions, but they can also be hired to oversee other kinds of valuable transactions.
The Important Duties of Escrow Agents
To review, the main responsibility of an escrow agent is to hold assets or funds until both parties come to a contractual agreement. However, there are other escrow agent duties to be mindful of. First and foremost, any assets or funds that an agent holds on behalf of the buyer must be transferred to a trust account. This account cannot pay any interest to the agent. In fact, the account should never be touched until the escrow agent has permission from the buyer.
Escrow agent duties are complex. The escrow agent must read and abide by all contractual agreements as written in the Purchase Contract and Joint Escrow Instructions. He or she is responsible for preparing escrow instructions and amendments, as well as clearing the title of any document or closing statement required by a lender from the buyer’s party.
Escrow agent duties also include reviewing that both the seller and buyer signed all the required documents. Also, to ensure the seller that the buyer is eligible, the escrow agent requests proof of insurance from the buyer’s insurance agent and presents it to the seller. If the buyer intends to purchase the asset with a loan, the escrow agent must also review all the signed loan documents. And finally, the escrow agent must ensure that the escrow paperwork was properly filled out, and confirm that all conditions established in the agreement have been satisfied by both parties before finalizing the transaction and closing escrow.
Bay Area Escrow Services
So, as you can see, an escrow agent has an important role to play. If you need reputable escrow services in the San Ramon area, contact us at Bay Area Escrow (925) 831-9099. We know escrow can seem confusing, but our team of licensed and experienced agents can handle all of your escrow needs, and guide you through the process.