What should I know about escrow?
Brought to you by Mike Hall, Hasson Company Realtors - Real Estate INSIDER -
Among unfamiliar terms in real estate, escrow ranks near the top. When a buyer and seller come to contract, but havent yet closed, the deal is said to be pending or in escrow.
Escrow fundamentally refers to a neutral third party, and in some states that function is held by an attorney. In Oregon, we usually use a title company. One company usually provides both escrow services and issues title insurance.
The escrow officer is neutral, executing instructions by all parties, holding and disbursing money and recording deeds. They dont endorse or approve terms or make sure any party is protected.
The title officer researches title, looking for troublesome issues. If all looks good, a title insurance policy is issued.
When buyer, seller and lender have finished preparing to close and all are in final agreement, escrow may be closed and the money and title transferred between the parties.
Escrow can also refer to an escrow account used for borrowers who prepay and allow their lender to hold money for payment of future tax and insurance bills. Those funds belong to the borrower and the lender merely holds them and forwards them when the bill comes.
In seller-financed (not bank-financed) transactions, often an escrow is opened as an intermediary to account for payments made between buyer and seller over a period of years.
Hasson Company Realtors
15400 SW Boones Ferry Road
Lake Oswego 97035