Posted on August 26, 2009 - 11:09 AM
by Keith Cook
All About Title and Escrow
In a typical real estate transaction, an escrow account is opened shortly after a purchase and sale agreement is signed by the buyer and seller. The buy-sell agreement spells out the terms of the transaction, including the price and to whom funds are to be disbursed.
An escrow agent, who is usually an attorney or officer of a title insurance company, accepts money into the escrow account from the buyer and the buyer's lender, then disburses the funds according to the purchase and sale contract. In addition to distributing funds to the seller, the escrow account is used to ensure that all material items associated with the transaction, including loan fees, title insurance and deed transferal fees, are paid. The escrow is said to close when all terms of the agreement are carried out and all funds are disbursed.