| Real Estate 101 - Escrow |
| What is Escrow as it relates to real estate? | |
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Escrow is a neutral third party that follows the instructions from buyer and seller of the property. It makes sure that the required funds (down payment from the buyer & the financed amount from buyer’s lender) are in the escrow account before the deed to the home is recorded in the buyer’s name. | |
| What is an Escrow company? | |
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Escrow Company or Escrow Holder is the neutral third party who performs the escrow function. | |
| Who opens Escrow? | |
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Based on who is responsible for paying the escrow fees (buyer or seller), the agent representing that party opens the escrow. | |
| How to open Escrow on planetRE? | |
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With a few efficient steps on planetRE an agent will be able to open escrow with any escrow company of choice. planetRE enables an agent to open escrow and transfer all required information to escrow company electronically. | |
| What is Close of Escrow (COE)? | |
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Close of Escrow, COE for short, is the conclusion of a real estate sale when all the requirements of the contract are met by both parties. At COE the title of the property is transferred to the buyer and funds are transferred to the appropriate parties (seller, brokers, seller's lender, etc.). | |
| How much is the escrow fee? | |
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Escrow fee is calculated based on the purchase price. Please ask your agent for an estimate of your closing costs, including escrow fees. | |
| Who pays for the escrow fee? | |
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Whether the buyer or seller pays for the escrow fees depends on what is customary in the area. Whoever pays for the escrow fees is ultimately decided by the real estate purchase contract between the buyer and seller. | |
| When does the escrow fee need to be paid? | |
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The escrow fee is charged when the escrow is closed. For some reason if you are unable to close the sale or purchase of your home, there may be a cancellation fee charged by the escrow company. | |
| What is an Escrow number? | |
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Escrow number is a reference number generated by the escrow company at the time escrow is opened. It's primarily used by the escrow company to identify the property file. You should make reference to the escrow number whenever you are communicating with the escrow company. | |
| What are Concurrent escrows? | |
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When closing escrow on property A is contingent on closing escrow on property B, both escrows closing simultaneously or concurrently are called concurrent escrows. The funds required by escrow A are transferred from escrow B, immediately upon closing. This is very common when down payment on one property comes from the proceeds on the sale of another property. | |
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