When escrow involves real estate, it refers to funds and documents that are held by an impartial third party, such as Alliance Title, on behalf of the buyer and seller and/or lender during the course of the transaction. The funds are distributed and documents are recorded only in accordance with the written instructions received from the parties.
People buying and selling real estate open an escrow for their protection and convenience. All parties rely on the escrow holder to faithfully carry out their mutually agreed upon instructions relating to the transaction, or to advise them if any of the instructions are contradictory or cannot be completed.
Once all terms and conditions of the written instructions have been fulfilled, and all closing conditions are satisfied, the escrow is closed and the transfer of property and money is completed.
How Does Escrow Benefit the Seller?
The seller is assured that the transaction will properly and promptly close. All liens will be paid and the title will not pass to the buyer until the purchase price is fully paid or the seller’s provision as to security for unpaid balances is fulfilled.
How Does Escrow Benefit the Buyer?
The buyer is assured that he or she may review the condition of the title to property by receiving a copy of the preliminary title report/title commitment prior to closing; that the transaction will be properly completed and the title will be cleared for the delivery of the loan proceeds or security documents.