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Learn About Escrow

A real estate transaction is complex. A single transaction involves several different parties, many carefully executed documents, and a high volume of funds. At Security Title, we have the management of these intricate transactions down to a science. You can look forward to a precise, clear, and efficient closing with Security Title, as our Escrow Officers guide your transaction through to your final closing date.

The Role of Escrow in Real Estate

An escrow company acts as an independent third party in a complex transaction, managing the transfer of funds and documents between the buyer, seller, real estate professionals, attorneys, mortgage lenders, and government agencies.

While an escrow account is open, we keep closing documents and funds in our care. We release those documents and funds only when certain conditions have been met, as agreed upon by the buyer and seller in the escrow instructions that they provide. As a neutral party in the transaction, the Escrow Officer requests reports, approvals, documents, and funds as necessary from the buyer and seller, keeping the transaction on track toward the final closing date. The Escrow Officer also submits the order to begin the title examination and insurance process, and works with the lender to fulfill requirements if a mortgage loan is involved in the transaction.

Anytime throughout the escrow process, the parties involved can contact the Escrow Officer for the current status of the transaction. With this central role, as a facilitator and depository, fulfilled by the escrow company, the parties to a real estate transaction can independently move forward on supplying inspection reports, securing funds, and otherwise fulfilling the requirements laid out in the escrow instructions.

Once all the instructions have been complied with, the Escrow Officer oversee the close of the transaction, ensuring that all parties are paid, funds are disbursed, deeds are signed, and documents are recorded.

What Happens in Escrow?

The Escrow Officer first reviews escrow instructions from the buyer, seller, and lender, to ensure that all instructions are consistent across the parties involved.

Then, the Escrow Officer begins to process the order. The Escrow Officer first orders a Preliminary Title Report, to start a title examination for any legal, financial, or physical property defects attached to the title from previous ownership.

The Escrow Officer then collects inspection reports, legal documents, and information on property taxes and any other costs associated with the property, as required by the escrow instructions. The Escrow Officer also receives the earnest money deposit set out in the purchase and sale agreement, which is held in the transaction’s escrow account.

With the title insurance and hazard insurance processes underway, the Escrow Officer works with the mortgage lender, to fulfill requirements needed to process the mortgage. The Escrow Officer also reviews instructions from other parties involved, laying out the steps to satisfy those requirements and assembling a final list of closing costs from each party.

Once the required documents and funds have been submitted, the mortgage application has been processed and approved, the legal documents have been prepared and the closing statement is ready, the Escrow Officer facilitates final settlement of the transaction. The buyer, the seller, the other parties to the transaction, a notary public and the Escrow Officer meet to sign the deed, mortgage, and other documents required for the closing.

After the settlement is finalized, the Escrow Officer ensures that the deed is recorded with the appropriate government agency in Guam or the Commonwealth of the Northern Mariana Islands, making the purchase and sale official in the public record. In the final step, the Escrow Officer disburses funds to the seller as agreed, and also disburses necessary funds for hazard insurance, title insurance, closing fees, property taxes, and other costs to the appropriate parties.