Explanation of Escrow:
An escrow is an arrangement on which a neutral third party, called an escrow holder, compiles legal documention, invoices and funds on behalf of the buyer and seller. The escrow agent works closely with you, your real estate agent and lender to ensure that the sale conditions are complied to within the time period called for in the Residential Purchase Agreement and Joint Escrow Instructions. After all parties have executed these documents and complied with all agreements described in the Purchase Contract, escrow then distributes the funds according to the buyer's and seller's instructions. Both the buyer and the seller rely on the escrow holder to carry out faithfully their mutual agreement instructions relating to the transaction. Escrow holder is bound by law to notify both parties if the instructions given are not mutually consistent or cannot be carried out. These instructions are drawn by the escrow officer, and signed by the buyer and seller. Since the escrow is not as detailed as the Purchase Contract, the information contained in the instructions is intended to direct the Escrow Officer in and inform all other parties as to the specific steps that are to be completed through the escrow instructions.