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Escrow Process in California
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Explaining Escrow
Can anyone be an escrow agent? An individual cannot be licensed as an escrow agent. In California, escrow companies must be licensed by the state’s Commissioner of Corporations... unless they are a bank, a savings and loan association, a title insurance company, a trust company, an attorney or a real-estate broker. A corporation organized for the purpose of conducting an escrow business holds the license. There is one exemption... a broker who performs escrow duties must be licensed by the Real Estate Commissioner, and must be the selling or listing broker in a transaction.
How do I find a reputable escrow agent? Usually your broker, real estate agent or lending institution will recommend one. Or you are may shop for one. You can obtain information various escrow companies by doing a “Google” search on the Web or visiting www.searchthis.ws/topics/escrow.aspx?source=2.
Are there rules for escrow agents? Yes. They include:
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No escrow agent may disseminate misleading statements or describe as an “escrow” any transaction that is not included under the definition of “escrow” in the state’s Financial Code. |
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A licensed escrow agent may not pay fees to real estate brokers or others for referral of business. Such prohibited “fees” would include gifts of merchandise or other things of value. |
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An escrow agent cannot disburse a real estate broker’s commission before closing escrow. |
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Escrow licensees may not solicit or accept escrow instructions, or amended or supplemental instructions, containing any blank to be filled in after signing or initialing. |
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They may not permit any person to make any addition to, deletion from, or alteration of an escrow instruction... unless it is signed or initialed by all persons who had signed or initialed the instructions. |
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By law, escrow agents must deliver, at the time of execution, a copy of any escrow instruction, or amended or supplemental instruction, to all persons executing it. |
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A real estate broker may only suggest an escrow holder if requested to do so by the involved parties. |
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Also, a developer who has a financial interest in an escrow company may not require that a purchaser use that company for escrow services when buying a home from the developer. |
How does my real-estate agent work with the escrow holder? When you complete a real-estate transaction with Stacy Eder, she will stay involved to keep the process moving along. So you can close escrow and move into that dream home you just bought... or invest that profit you made on a home sale. Here are some actions she will take:
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Make certain that the deposit receipt reflects the buyer’s and seller’s intentions. |
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When opening escrow, she will bring the seller’s recorded grant deed. These documents establish the correct legal description and the manner in which seller holds title to the property. |
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Ensure all instructions and amended instructions are in writing. |
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She may ask for your travel schedule, anticipating any actions that need to be taken before you go out of town. This prevents delays to the process. |
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Be sure the escrow officer knows how buyer wants to take title. |
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Give escrow holder names and addresses of all lenders or loan servicing agents and the loan numbers. |
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Check with the seller regarding bonds or other liens on the property. |
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If new financing has not been arranged before escrow is opened, notify the escrow officer immediately when the loan has been obtained. |
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Before escrow is opened, determine how fire insurance is to be handled. |
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Be aware of the escrow holder’s time requirement relating to non-cash deposit of funds. That’s because all checks must “clear” before the escrow holder can make disbursements. |
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Provide escrow with the correct spelling of buyer’s name, address and telephone number, including all business telephone numbers. |
Any questions? Call Stacy at 760/880-2442.
Or visit the Web at www.dre.ca.gov/reftoc.htm.
Return to Escrow Introduction
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