Main Content

Role of Escrow

Escrow is the neutral third party that acts as the depository for documents and money in a real estate transaction.



The period that you are “in escrow” is often 30 days, but may be longer or shorter depending on the type of contingencies, loan and financing you have. During the escrow period, each item specified in the contract must be completed satisfactorily. By the time escrow is opened, buyer and seller have come to an agreement on the closing date and the contingencies removal period.

Upon request, escrow provides copies of the real estate purchase contract, earnest money deposit and escrow instructions to the lender at the beginning of the transaction. Additional items may be estimated closing statements, copies of trusts, homeowners’ association information and evidence of insurance.

Escrow provides the title company with the buyers and sellers completed statements of information and items specified in the preliminary title report as needed to clear title. The title officer reviews them and may request additional items.

Escrow creates the estimated and final closing statements, which are an accounting of the real estate transaction.

Escrow receives prints and reviews the loan documents, specifically the lender’s instructions. A member of the escrow company will prepare the HUD statements and arrange the signing of these and other documents with a notary public. Once the statements and other documents are signed and returned to escrow, the escrow officer assists the lender in compiling funding conditions. Escrow is then notified by the buyer’s lender when they are ready to release loan funds.

When all conditions of the escrow have been met, including receipt of all necessary and cleared funds, escrow then notifies the title company to release the documents for recording. Upon confirmation of recording, escrow completes the prorations and costs in order to reconcile/balance all funds to be disbursed. The property title is transferred from the seller to the buyer and escrow closes.

Disclaimer-This page is for informational purposes only and not to be construed as legal or tax advice.
Before making any decisions dealing with the subject matter found on this page, we recommend you seek out specific advice from a legal or tax professional.