What is escrow?
Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law – Section 17003 of the Financial Code – provides the legal definition.
Why do I need an Escrow?
Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
How does escrow work?
The principals to the escrow – buyer, seller, lender, borrower – cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, he will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.
The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be “closed.” Each escrow, although following a similar pattern, will be different in some respects, as it deals with your property and the transaction at hand.
The duties of an escrow holder include; following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms funds in accordance with instructions and provide an accounting for same – the Closing or Settlement Statement.
KNOW THE BST MARINA ESCROW DIFFERENCE:
Did you know that not every escrow company is licensed? It is important to know the difference before selecting an escrow company to handle one of the biggest transactions in your life.
BST Marina Escrow:
- Neutral Third Party: YES
- State Regulated: YES
- Escrow License Required: YES
- Department of Justice Investigation & Fingerprints for All Employees: YES
- Financial Liquidity Requirements: YES
- Bonding Requirements: YES
- Regulatory Audits: YES
- Annual CPA Audit: YES
- Manager Experience Requirements: YES
- Company’s sole business is doing escrow: YES
Real Estate Broker Owned Escrow Company:
- Neutral Third Party: NO – Employed by Real Estate Broker
- State Regulated: NO
- Escrow License Required: NO
- Department of Justice Investigation & Fingerprints for All Employees: NO
- Financial Liquidity Requirements: NO
- Bonding Requirements: NO
- Regulatory Audits: NO
- Annual CPA Audit: NO
- Manager Experience Requirements: NO
- Company’s sole business is doing escrow: NO
Title Company Owned Escrow Company:
- Neutral Third Party: NO – Employed by Title Company
- State Regulated: NO
- Escrow License Required: NO
- Department of Justice Investigation & Fingerprints for All Employees: NO
- Financial Liquidity Requirements: NO
- Bonding Requirements: NO
- Regulatory Audits: NO
- Annual CPA Audit: NO
- Manager Experience Requirements: NO
- Company’s sole business is doing escrow: NO