WHY YOU SHOULD RETAIN AN INDEPENDENT ESCROW COMPANY AS YOUR PROVIDER FOR REAL ESTATE CLOSING SERVICES.
Most real estate transactions in the State of California utilize the services of an escrow company. Ironically, escrow remains one of the least understood elements of the real estate process.

Because of this, buyers and sellers often place their faith in the real estate broker or lender to recommend an escrow company. What many consumers don't realize, however, is that they are entrusting this escrow company to safeguard their funds being held in trust.
The responsibility to protect the consumers' interests should not be taken lightly. The escrow holder must remain impartial during the escrow period to ensure fair representation of all parties. It is crucial, then, that the broker, lender or consumer makes a knowledgeable and informed decision in choosing an escrow company.

The stringent requirements of the Department of Corporations (DOC), assure that every DOC licensed escrow company has met the highest standards in the industry. The bottom line is that a DOC licensed escrow company is the best possible neutral third party to complete your real estate transaction. Whether searching for an escrow holder yourself, or looking to recommend one to a client, a DOC licensed escrow company gives you peace of mind. Why do I need escrow? Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
With the increasing complexity of business, law and tax structures, it takes a trained professional to supervise the transaction. For this reason, a DOC licensed escrow company is your best choice.

WHAT DO I HAVE TO DO WHILE IN ESCROW?
The key to any transaction as important as your sale, purchase or loan, is to READ and understand your escrow instructions. If you do not understand them, you should ask your escrow officer to explain the instructions.

Respond quickly to correspondence. This will assist in the timely closing of the transaction.
If you are required to deliver documentation to escrow holder, do so in a timely manner. The escrow holder can only act on an instruction provided that instruction is mutually agreed upon by the principles to whom the instruction pertains. When depositing funds into the escrow, make sure that you provide “good” funds in the form required by the escrow officer. Company procedures differ in this regard, and there are ways that you can help at the time of closing; check with your escrow officer. For example, do not give the escrow officer a personal check and expect the escrow to close immediately; the escrow can only close on cleared funds, and the processing of a personal check can take possibly a week or more.

our escrow officer is not an attorney, nor an accountant, and as such, cannot practice law or provide financial advice. You should consult your lawyer or CPA for such services. Do not expect your escrow officer to advise you as to whether or not you have a “good deal” or are doing things the right way. The escrow officer is there to follow the instructions given by the principals (Buyer and Seller) in the escrow.

WHEN IS ESCROW CLOSED?
After all monies have been deposited and all agreements have been satisfied, escrow holder will then cause to have the Grant Deed recorded with the county recorder’s office as this transfers title of the property from seller to buyer.

When the escrow officer closes the escrow, some of you may want the closing papers, checks, title policies, statements, etc. made available immediately. There are many aspects to the closing of the escrow, and some of these cannot be processed on the day of the closing; they may take several days. If you have a special need, for example wired funds on the day of closing, you should communicate that need to the escrow officer early in the processing of the escrow, or as soon as your need is known.

WHAT FEES AND COSTS WILL BE CHARGED?
The escrow fee is normally based on the size and complexity of the transaction. Since there are so many types of escrows and every transaction is different, there are no set fees. Usually the escrow fee is charged in accordance with the agreement of the parties.
Escrow fees are not regulated by the State. Escrow holders, like any other businesses, will charge fees that are commensurate with the costs of producing the service, the liability undertaken, and the overhead expenses, which include a profit factor. Therefore, the fees will vary between companies and from county to county. Normally, the escrow holder will follow its minimum fee schedule, which will provide for extra charges based upon the differing elements of your escrow. On occasions, an additional fee will be charged for unusual expenditures of time on a given transaction.

The escrow holder has no control over the costs of other services that are obtained, such as the title insurance policy, the lender’s charges, insurance, recording charges, etc.

Your escrow officer, upon request, can provide you with an estimate of the escrow fees and costs as well as fees charged by others, provided such information is available.

THE CLOSING IS COMPLETE – NOW WHAT?
Upon closing, review the closing statement to determine that the costs were allocated in accordance with your instructions and make inquiries if necessary. Be sure to read and understand your closing statement.

It normally takes a period of time after closing before the hazard and title insurance policies are delivered to you from the respective agencies. Any recorded documents to which you are entitled are usually mailed to you after the escrow has closed. Frequently these documents will come to you directly from the office of the recorder or the Secretary of State in the case of personal property filing.

WHAT IS A CLOSING STATEMENT?
A closing statement is an accounting, in writing, prepared by the escrow company at the close of escrow, which sets forth the charges, and credits of your account. The items shown on the statement will reflect the purchase price, the funds deposited or credited to your account, payoffs on existing encumbrances and/or liens, the costs for all services and a determination of the funds you are entitled to at the close of the escrow. When you receive your closing papers, review the closing statement; it is extremely logical and reflects the financial aspects of YOUR transaction. If anything does not make sense to you, you should ask your escrow officer for an explanation.

WHAT IF THE TRANSACTION ISN'T COMPLETED? IS MY DEPOSIT REFUNDABLE? WHO PAYS THE FEES?
When a transaction fails to close, a cancellation agreement must be reached between the parties. This cancellation agreement must be put in the form of a written instruction, just as your contract was.

Since the deposit is part of the escrow contract, both the buyer and the seller must mutually agree to its disposition. Instructions for the disposition of this deposit should include, among other things, provisions for payment of charges incurred during the escrow. This would include fees and costs incurred by the escrow holder and charges such as loan processing and title insurance fees as specified in the escrow instructions.

WHAT ABOUT CANCELLATIONS?
No escrow is opened with the intention that it will cancel, but there are occasions when a contingency cannot be met or when the parties disagree during the pendency of the escrow. Some escrow holders provide for such an event by incorporating an instruction in their typed or printed General Provisions.

Ordinarily, an escrow holder will take the position that no funds on deposit can be refunded until the escrow holder is in receipt of mutual cancellation instructions signed by the principals. The escrow holder cannot normally make a determination as to who is the “rightful” party in a dispute on a cancellation and therefore will not return the funds or documents until the principals agree; the escrow holder is not a judge

Do expect to be charged a cancellation fee, as this is a charge for professional services rendered and quite often for several “out of pocket” expenses that have been incurred on the client’s behalf. These fees can vary from company to company depending upon their policies.

Sometimes, when a dispute exists, the escrow holder may be forced to allow a court to decide which party is entitled to what documents or funds; this is called an Interpleader Action. Fortunately, most disputes are resolved before the interpleader is filed, as the costs for such legal actions are extreme. Those costs, incidentally, are normally paid out of the funds on deposit in the escrow.

THE PERFECT ESCROW; DOES IT EXIST?
Perfection is sometimes difficult to achieve, especially in dealing with the complexities of the escrow, the desires of the parties and other matters that are sometimes far beyond the control of the escrow officer. It is human nature to err on occasion, but your escrow officer has the background, training, education support and systems in place necessary in order to accomplish the objectives of the escrow instructions. In the event you have any problems in the handling of your escrow, you should first contact the escrow officer. If your problem is not resolved, you should next contact the management or owner of the company. if the matter requires additional attentions, you can call the proper regulatory agency.
There are five different regulatory agencies governing the escrow operations in California; Superintendent of Banks; Department of Corporations; Department of Insurance; the Department of Real Estate; and Department of Savings and Loan