What is escrow?
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What Is Escrow?
Escrow is a process that provides for a fair and equitable transfer of
property from one person to another.
By Broderick Perkins
Escrow opens when the buyer and seller sign a sales contract, commonly
called a real estate purchase agreement and receipt of deposit. The
contract, along with any additional instructions, serves as instructions
for the escrow officer.
Escrow assures that the lender releases the home purchase funds at or about
the same time that the deed is recorded to reflect new ownership. Escrow
includes depositing, with a neutral third party, funds, documents and
instructions necessary to complete the transfer.
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Because the real estate transaction involves large sums of money and reams
of documentation, escrow is not always a predestined, step-by-step process,
but can become a confusing end game of details, nit picking and overlapping
procedures. It requires preparation, attention to detail, and desire from
both sides to close the deal.
Regional custom will dictates who (the buyer or the seller) chooses the
neutral third party and who that third party will be. A neutral third party
can be an escrow officer from an escrow company, someone from a title
company or from a title and escrow company. Some regional areas use title
and escrow attorneys. Custom and market conditions also dictate which
escrow costs the buyer or seller pays. The amount typically totals about 1
to 2 percent of the
Escrow - Wikipedia, the free encyclopedia
** Escrow **
From Wikipedia, the free encyclopedia
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This article is about an escrow of money. For escrows of computer source
code, see source code escrow.
An *escrow* is:
· an arrangement made under contractual provisions between transacting
parties, whereby an independent trusted third party receives and disburses
money or documents for the transacting parties, with the timing of such
disbursement by the third party dependent on the fulfillment of
contractually-agreed conditions by the transacting parties, or
· an account established by a broker, under the provisions of license law,
for the purpose of holding funds on behalf of the broker's principal or
some other person until the consummation or termination of a
· a trust account held in the borrower's name to pay obligations such as
property taxes and insurance premiums.
The word derives from the Old French word /escroue/, meaning a scrap of
paper or a roll of parchment; this indicated the deed that a third party
held until a transaction was completed.^
· 1 Types
· 1.1 Internet escrow
· 1.2 Banking
· 1.3 Intellectual property
· 1.4 Law
· 1.5 Real estate
· 2 Legal implications
· 3 See also
· 4 References
· 5 External links
Escrow generally refers to money held by a third-party on behalf of
transacting parties. It is best known in the United States in the context
of real estate (specifically in mortgages where the mortgage company
establishes an escrow account to pay property tax and insurance during the
term of the mortgage).^ Escrow is an account separate from the mortgage
account where deposit of funds occurs for payment of certain conditions
that apply to the mortgage, usually
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