19 Feb The Role An Escrow Officer Plays
There are many participants when it comes to a real estate transaction, and those include escrow officers. Whether you’re buying or selling a home, the sheer volume of money changing hands is incredible! And this is where your escrow officer comes into play.
Essentially, they are a neutral, outside third-party whose job is to ensure that all of the terms and conditions of the deal are accounted for, and the transaction is settled as planned. Escrow officers juggle many essential tasks during a real estate transaction, including title-related services.
Whether you’re a first-time homebuyer or seller, or you’ve been down this road before, your escrow officer is an invaluable resource. While they are never involved in any of the negotiations, their role includes tackling some of the more complicated parts of closing out a home sale, including making sure that all documents and financials check-out.
Here’s a closer look at the role an escrow officer plays:
- Buyer’s Funds: Receive and hold in a non-interest paying trust account during escrow.
- Purchase Contract & Joint Escrow Instructions: Review and comply with all agreements as detailed as they pertain to the escrow process.
- Instructions: Follow mutually signed, written instructions agreed upon by buyer and seller during escrow.
- Paperwork: Manage the preparation of Escrow Instructions/General Provisions, Amendments, Grant Deed (for seller’s signature), Estimated Closing Statement, and any other documents required to clear title or that are required by the new lender.
- Reports: Often, reports are ordered by the buyer, seller, or agents outside of escrow, but there are times when the escrow officer will obtain reports as required by the purchase contract and provide the same to the buyer during escrow for their review. This is all dependent on the scenario.
- Receipt of Important Documents: Ensure that escrow is in receipt of the 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.
- Preliminary Loan Documents: Receive the loan documents from the buyer’s lender (when applicable) and prepare amendments and estimated closing statements as required by the lender based on the lender’s instructions.
- Evidence of Insurance: Based on the requirement of the new lender, order the Evidence of Insurance from the buyer’s insurance agent.
- Signed Loan Documents: Send the signed loan documents and all lender-required items to the new lender for funding.
- Clearing Title: Submit original recordable documents and any releases required to clear title to the title company for recording at the close of escrow.
- Receipt of Funds: Ensure 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.
- Equity Review: Ensure that the seller has sufficient equity in the property to cover all costs, the payoff of liens, and any invoices agreed upon by buyer and seller during the escrow.
- Finalize Required Paperwork: Ensure that all of the required paperwork is in escrow to provide the buyer with a clear title to the property.
- Finalize Purchase Agreement Conditions: Ensure that all conditions agreed upon by the buyer and seller on the purchase agreement and in writing through escrow have been satisfied before closing the escrow and transferring the property into the buyer’s name.
Keep in mind that various signatures are required during a real estate transaction, so buyers and sellers should maintain close contact with their agents and lenders throughout the process.
If you have any questions about the escrow process or would like assistance with an escrow, please contact us. We would be delighted to assist you!