Scottsdale and Metro Phoenix Area Real Estate

What is Escrow?   This is what takes place immediately after both the buyer and seller, assisted by a qualified Real Estate Agent, have agreed to the provisions of a contract and have signed that contract.  Escrow is defined as the holding of documents and funds by a neutral third party  pending the fulfillment of a particular condition or event.  The escrow holder has the obligation to safeguard the funds and/or documents until all provisions of the escrow have been satisfied and the contractual obligations by the Buyer and Seller have been met. Escrow is the disinterested third party, which makes them unbiased and impartial. 

Opening a Transaction. When escrow receives a fully executed contract (and earnest money if applicable), escrow will immediately order the title work so that a thorough title search and examination can be done.  When the title commitment, title or preliminary report is received, it is the Escrow Officer's job to review the commitment and then send them out to all appropriate parties.

Processing the Transaction. Once the Preliminary Report is received and reviewed, escrow then begins processing the file. Taxes, homeowner association dues, maintenance fees and payoffs for liens of records are checked and statements ordered.  All applicable charges are assembled and a settlement statement is prepared.

Escrow then begins processing and coordinating the flow of documents.  The escrow and conveying documents (Deed to transfer property) are drawn and sent to Buyer and Seller for proper execution. Although it is not the job of escrow agent to cure defects of title, performance, or other services extraneous to closing the transaction, Escrow Agent may assist in helping to determine what steps may be taken in order to clear any extraordinary circumstances that are disclosed by the Preliminary Title Report.    

Closing the Transaction:   Upon receipt of properly executed documents, the Escrow officer will review all the documents involved in the transaction to make sure they fit the transaction as contracted for.  A thorough investigation that everything needed to close the transaction has been satisfied. The analysis will include, but is not limited to the following; the proper execution of escrow and mortgage documents,  checking that all taxes have been paid and prorated between buyer and seller when necessary, ensuring financial consideration has passed and all monetary consideration can be properly disbursed.  After good funds are received,  the escrow officer, balances the disbursement sheet, ensures the transferring documents are filed of record at the County Recorder's office and funds and closes the escrow file.  Last, but certainly not least, the title policies are prepared and forwarded on to the owner and Lender. 

What can’t escrow do?
Anything that is not in the contract, counter-offers and addendums.

In addition, there are some other functions that the Escrow Agent is prevented from performing, due to reasons of liability, legal restrictions or because of its neutral position, such as:

• Give advice
• Negotiate
• Prepare contracts, counter-offers or addendums
• Prepare legal documents beyond the basic “fill-in-the-blank” forms

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