Frequently Asked Questions
1. WHAT IS THE DEFINITION OF ESCROW?
escrow [es'kro] - a deed, bond, or other written agreement put in charge of a third person, until certain conditions are fulfilled.
2. WHAT IS THE DIFFERENCE BETWEEN A TITLE COMPANY ESCROW AND AN INDEPENDENT ESCROW COMPANY SUCH AS INLAND EMPIRE ESCROW?
You may be approached by a title company escrow, to use their services as an escrow company. However, do you really know the difference between an independent escrow company, such as INLAND EMPIRE ESCROW, and a title company escrow? A title company escrow is regulated by the Department of Insurance, which focuses on insurance laws, and is able to offer incredibly low fees, as an incentive to order title insurance, which only relates to permanent dwellings and land. Independent escrow companies are advantageous, as they are required to be bonded and audited annually by the Department of Corporations. Title company escrows are never audited, are not required to be bonded, do not complete escrow officer certification and are not even required to hold an escrow license! The simple answer is to protect yourself with an independent escrow company, such as INLAND EMPIRE ESCROW, the leader in independent escrow for over 17 years. If you should have any questions regarding title company escrows, please contact our staff.
3.WHAT IS ESCROW, AND WHAT DOES IT DO?
"Escrow" is the formal procedure utilizing an independent third party, "Escrow Agent" to effect the transfer / sale of the terms of, or an encumbrance upon property.
Simply put, an escrow is the involvement of impartial escrow agent to act as an intermediary between the Buyer and Seller, to collect documents and/or funds for delivery to the appropriate parties upon completion of the terms and conditions of the escrow instructions or contract.
4.WHO PAYS THE ESCROW FEE AND HOW MUCH IS IT?
Generally this means, when a person buys a home he does not pay the Seller directly. Instead, he deposits funds with an escrow company, which then remits to the Seller on the Buyer's behalf, when the property has been transfered into the Buyer's name.
Not only is,"Escrow" the concept of a third party recieving and disbursing funds, but it also includes other valuble transaction services. In order to facilitate the transfer of property from one owner to another, the best escrow comapanies will:
· Prepare, review and/or revise escrow instructions.
· Determine the legal ownership and status of the property through a "Title Search".
· Request a beneficiary's statement if a debt is to be assumed by the buyer.
· Confirm that the buyer is "Qualified" and meets the lender's requirements.
· Confirm property meets requirements imposed by buyer and/or lender.
· Prorate all related financial matters involved in the ownership transfer.
· Ensure all legal documents are complete, including recording deed.
· Comply with time limits imposed in instructions.
· "Close" escrow when all instructions have been fulfilled.
· Disburse funds as instructed, including all related fees.
Prepare final statement for all concerned parties.