Escrow Thursday: Who Does What in the Escrow Process?

Who Does What in the Escrow Process?

The Seller and Seller’s Broker

• Delivers a fully executed purchase and sale agreement to the escrow agent.

• Executes the paperwork necessary to close the transaction.

• Deposits any amendments to the purchase and sale agreement.

The Buyer and Buyer’s Broker

• Deposits funds required to close, in addition to the purchase price, with the escrow agent.

• Approves the inspection reports, commitment for title insurance, or other items as called for by the purchase and sale agreement.

• Fulfills other conditions specified in the purchase and sale agreement.

The Lender (if applicable)

• Deposits proceeds of the loan.

• Directs the escrow agent of the conditions under which the loan funds may be used.

The Escrow Agent

• Obtains the order for title insurance.

• Obtains approvals from the buyer(s), the commitment for title insurance, and any other inspections that are called for in the purchase and sale agreement.

• Obtains any required payoffs/release documents to clear title.

• Receives funds from the buyer and/or lender.

• In most cases, prepares vesting documents and excise tax affidavit on seller’s behalf.

• Prorates insurance, taxes, rents, etc.

• Prepares a final statement (commonly referred to as the “HUD 1 Statement” or “Settlement Statement”) for each party, indicating amounts paid in conjunction with the closing of the transaction.

• Oversees the signing of loan documents.

• Forwards deed to the county for recording.

 

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