During the often long, complicated, emotional process of buying or selling your home, you probably don’t think much about the people who service your escrow account. In many cases, the seller’s real estate agents choose which escrow company to use. But, as a home buyer or seller, you might be interested to know that not all escrow companies are created equal.
What Escrow Is
The California Escrow Law: Section 17003 of the Financial Code defines escrow in legalese, offering the full legal definition of the term. More simply stated, an escrow is: a deposit of funds for a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event.
Why You Might Need an Escrow Account
When it comes to home buying and selling, people need assurance that funds and/or property will not change hands until every specific detail of the transaction instructions have been followed to the letter. Escrow companies, such as Exact Escrow, safeguard the funds and/or documents and disburse funds and/or convey title only after all of the provisions of the escrow have been fulfilled.
Typical Escrow Duties:
- Following instructions principals and parties give relative to the transaction.
- Handling the funds and/or documents according to pre-determined terms.
- Paying all bills as authorized.
- Responding when principals make requests.
- Close escrow only after funds are paid in accordance with instructions.
- Provide an accounting in the form of a Closing or Settlement Statement.
Who Chooses the Escrow Company
Principal players determine which escrow company to use. If a real estate broker is involved, he or she may recommend an escrow holder. However, all principals are entitled to choose the escrow holder they believe to be the most competent and experienced to manage the type of escrow at hand.
To protect consumers, referral fees are illegal. However, it is not illegal for brokers, title companies or lenders to own their own escrow companies. As a home buyer or seller, to make sure your escrow company is working in your best interests instead of the in the best interest of the person who pays their salary, you may want to consider hiring an independent escrow company, like Exact Escrow.
Why You Should Choose an Independent Escrow Company
- In California, where Exact Escrow is located, the major difference between an independent versus a controlled escrow agency is that the Department of Business Oversight requires escrow company applicants to fulfill stringent guidelines for licensure. The requirements for independent firms are stricter than those placed on non-independent escrows.
- One such qualification is that independent escrow agency owners join the Escrow Agents’ Fidelity Corporation (EAFC). This type of oversight protects consumers from fraud, as applicants with a history of misconduct or criminal record are denied membership.
- California also requires independent escrow agencies to make sure someone with at least five years of qualified escrow experience remains on-site during business hours. Outlying branch offices are required to provide an employee who at least four years of escrow experience during business hours.
- Licensed, independent escrow companies are also required to pass extensive background checks, fingerprinting and an audit. So, you can rest assured that your licensed, independent escrow company has been fully vetted to ensure principals, brokers and all others receive quality, trustworthy escrow services.
About Exact Escrow in La Verne, California
If you plan to downsize (or upsize), buy a home, or refinance your mortgage loan, please consider using Exact Escrow Inc. We are a full-service independent escrow company dedicated to exceeding our client’s every expectation. Our goal at Exact Escrow Inc. is to make sure even your most complicated transaction closes smoothly and efficiently. Call today to speak directly to an escrow officer (909) 542-1062.