Once the buyer and seller have reached an agreement, the signed purchase
agreement, along with the buyer's earnest money deposit, is submitted to
the title company and escrow is opened. The title company becomes the escrow holder, and their responsibility is to follow the mutual written instructions of the buyer and
seller. The escrow company also maintains a neutral stance to facilitate the successful
exchange of money and property between the parties. In addition, the title company will follow the instructions of the lender in meeting their
conditions.
Additional Escrow Company Responsibilities:
- In a dispute, the AAR Residential Resale, Commercial and Land Purchase Contracts, gives the escrow company decision-making power over who will receive the earnest money.
- The escrow company provides the Commitment for Title Insurance. The document is the escrow/title company’s commitment to
insure the title of the property subject to exceptions and requirements
listed in the commitment.
- Will also provide parties with information pertaining to HOA fees and governing documents, CC&R's, and plat maps.
- Will transfer ownership for an on-site waste water facility and domestic water well.
- Will pay off any outstanding liens and real estate property taxes.
- Will pay off fees through escrow instructions to third parties that made inspections and repairs to the property.
- The escrow officer completes the settlement statement or HUD-1, which shows the costs associated
with the closing of a resale transaction. It shows how much money the
buyer will need to bring in to close escrow and how much money
the seller will receive.
