Frequently Asked Questions

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What is an escrow account, and why is it necessary?
An escrow account involves the deposit of funds, a deed, or another document by one party to be delivered to another party once a specific condition or event occurs. Whether you're the buyer, seller, lender, or borrower, the purpose is to ensure that no funds or property exchange hands until all transaction instructions are met. The responsibility of the escrow holder is to safeguard the funds and only release them or transfer title after fulfilling all requirements.

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Who selects the escrow account?
Typically, the choice of escrow holder is mutually agreed upon by the involved parties. While a real estate agent may suggest an escrow agent, the principals have the right to select a competent escrow holder familiar with the specific type of escrow involved. Regulations prohibit referral fees, ensuring consumers receive quality escrow services without compromise.

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What fees and expenses are associated with the escrow account?
Escrow fees are based on the costs of service provision, assumed liability, and overhead expenses, including profit margins. Consequently, fees vary among companies and jurisdictions. Generally, the escrow holder adheres to a minimum fee schedule, with potential additional fees related to specific aspects of the escrow. Estimates of escrow fees and expenses can be provided upon request.

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What if I need to cancel the escrow account?
While escrows are initiated with the intention of completion, situations may arise where conditions cannot be met or parties disagree. Contingency plans for such scenarios are outlined in the General Provisions document. Typically, an escrow holder maintains that deposited funds cannot be refunded without mutual cancellation directives from the principals, potentially incurring a cancellation fee.