An escrow agent is the person who handles all escrow services when you buy or sell a home, such as distributing money between the buyer and seller and managing all of the necessary paperwork to help you close. Escrow agents help make sure that all financial documents are completed in a timely and accurate manner. They also may assist in a number of other jobs, such as writing the deed, initiating a title search, and finding title insurance.
Escrow agents are typically agreed upon by both your lender and the seller to help manage the transaction. By acting as a neutral party, escrow agents represent the interest of both the buyer and seller to help minimize risk in real estate transactions for both parties.
But, you still may be wondering who an escrow agent works for and who hires an escrow agent. Let’s dive in to learn more about who your escrow agent works for, what their job is and other questions you may be thinking.
Who Does the Escrow Agent Work For?
The escrow agent works for both the buyer and seller and is typically agreed upon by both parties or their agents. The primary interest of the escrow agent is to handle all of the terms and contingencies of a real estate contract and will help to ensure you have a smooth transaction.
The role of the escrow agent is not solely limited to handling the money in a contract but can also include a wide range of roles and responsibilities.
What is the Job of an Escrow Agent?
The job of an escrow agent is to ensure that all real estate transactions are accurately conducted.
An escrow agent has many responsibilities including:
- Reading through the contract to ensure all terms and contingencies are met
- Ensuring that all money and assets in escrow are financially secure
- Managing communication between both parties
- Writing up a deed
- Conducting a title search
- Issuing title insurance
Once all contractual terms have been met and both parties are satisfied, the escrow agent will release all of the funds out of escrow to finalize your deal.
It’s important to note that not all real estate transactions will be straightforward and that there will be situations that can slow the work of an agent. Below is a list of tips to help you be more proactive to make the process of escrow fast and easy.
Tips to Improve the Process of Escrow
To help ensure you have a smooth transaction, here are a few things you can do or provide your escrow agent with to help reduce the chances of delays.
In the initial closing stages, your escrow agent will need several documents from you to sign. While your lender will work with your escrow agent to acquire these documents, it’s important that you are responsive to any requests for document signature or any problems that arise so that you can continue through the process of closing.
For example, if your escrow agent needs a final appraisal to approve the sale of a home, you will need to be present to sign for the appraisal in person or, at the very least, digitally promptly.
Be Upfront with Your Finances
Your lender or escrow agent will discover any lies or hidden debts when you try to buy a home, so it’s essential to clear up any discrepancies before they arise. Any unknown variables could put your real estate transaction in jeopardy and end the closing process before it begins. Try to clear up any outstanding debts and communicate this to your lender so that they can communicate this to the escrow agent.
Don’t Take Out Any Additional Loans or Debt
Any additional debt you take out between the time you purchase a home will drop your credit score and impact your ability to acquire a loan. Creditors will see that you will have a harder time paying back your loan with the additional debt and may either cancel your loan or raise interest rates to protect themselves.
Clear Up Any Issues with Title
Finally, you will not be able to close on a home until you or the seller clears all issues associated with the title. Any liens or liabilities must be addressed and negotiated between you and a seller to issue a new title and finalize a deal. Again, be responsive to the escrow’s agent requests and talk to your lender on options to help you clear up any title issues and address them before they derail your deal.
Escrow agents are important intermediary parties who help facilitate real estate transactions and satisfy both parties. As a neutral party, the escrow agent is only concerned with ensuring that all contractual obligations are met.
As such, you can fully trust an escrow agent to conduct their due diligence and ensure that you are not being ripped off.