What is Escrow?
Escrow is a service which provides the public with a means of protection
in the handling of funds and/or documents. Escrow enables the buyer and
the seller to transact business with each other through a neutral party,
thereby minimizing their risk.
In the escrow, all parties involved give their instructions to this
neutral intermediary, the “escrow holder,” whose duty it is to assure
that no funds or property will change hands until all instructions have
been carried to completion.
Why do I need an escrow?
With the increasing complexity of business, law and tax structures, it
takes a trained professional to supervise the transaction.
Whether you are the buyer, seller or borrower; you want the assurance
that no funds or property will change hands until all of your
instructions have been met.
Can I get legal advice from an escrow officer?
An escrow officer is not a legal counselor and cannot give legal advice.
Remember, the purpose of escrow is to take, and comply with,
instructions to carry out the mutual agreement of the principals. In the
event that the parties disagree, the escrow officer must remain
neutral until agreement is reached. The transaction should not be
negotiated in the escrow office, nor should an escrow officer become
involved in the negotiation.
If I still have questions about my escrow, where can I go for
If negotiations have been conducted through a real estate agent or
person should be your primary consultant. The role of
an independent agent prohibits the escrow officer from answering many of
your questions. However, a knowledgeable escrow officer, whose
responsibility is giving impartial service to all parties, will refer
you to the proper source for your answers. An escrow officer will often
suggest that the customer seek the advice of legal counsel or a tax
Information on the above questions
and answers was received from the California Escrow Association. “The
CEA is a statewide organization for professional escrow practitioners.
It is dedicated to maintaining the highest standards in escrow through
continuing education of escrow personnel.”