Escrow Settlement Services 2018-06-01T15:12:09+00:00


The Escrow Settlement Process was developed to help facilitate the sale or purchase of your home.

The Escrow Agent, such as a Title Company, accomplishes this by:

  • Acting as the impartial “stakeholder,” or depository of documents and funds.
  • Processing and coordinating the flow of documents and funds.
  • Keeping all parties informed of progress on the escrow.
  • Responding to the lender’s requirements.
  • Securing a title insurance policy.
  • Obtaining approvals of reports and documents from the parties as required.
  • Prorating and adjusting insurance, taxes, rents, etc.
  • Recording the deed and loan documents.
  • Maintaining security and accountability of monies owed and owing as part of the escrow process.

Every Case is Different . . .

The examples and explanations described in the FAQ’s below are designed to acquaint you with the escrow process and are based on relatively simple escrows. Every escrow is unique and most are more complex than explained here. If you have questions about the escrow process, we suggest you contact an escrow officer at Keystone Title Agency to obtain detailed advice and further explanation.

What is an Escrow and Why is it Needed?

An escrow is an arrangement in which a disinterested third party, called an Escrow Agent, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer’s and seller’s instructions.

People buying and selling real estate often open an escrow for their protection and convenience. They rely on the escrow agent to carry out faithfully the terms of the sales agreement and lender’s instructions.

An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments & funds, deeds and many other items, using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions on their behalf without further consultation. This saves much time and facilitates the closing of the transaction.

Who May Hold Escrows?

The licensed Escrow Agent may be any disinterested third party.  There are two important reasons for selecting an established escrow title insurance company such as Keystone Title Agency.  One is that real estate transactions require a tremendous amount of technical experience and knowledge to proceed smoothly. The other is that the Licensed Escrow Agent will be responsible for safeguarding and properly distributing the proceeds from the purchase.  Licensed Escrow Officers with established Title Agencies are experienced and trained in real estate procedures and title insurance practices.

Why Is Impartiality Important?

A Licensed Escrow Officer must remain completely impartial throughout the entire escrow process.  She or he will normally adopt a courteous but rather formal manner when dealing with parties to the escrow, keeping conversation to the matters at hand in the escrow.  This formal behavior is meant for the benefit of all concerned, since the Licensed Escrow Officer must follow the instructions of the purchase agreement and lender’s instructions, if any, without bias.

What is Closing the Escrow?

Once all the terms and conditions of the instructions of both parties have been fulfilled, and all closing conditions satisfied, the escrow is closed and the safe and accurate transfer of property and money has been accomplished.

What Does Each Party Do in the Escrow Process?

The Seller

  • Executes and deposits all documents with the escrow agent.
  • Deposits any other required documents such as tax receipts, addresses of mortgage holders, equipment warranties or home warranty contracts, etc.

The Buyer

  • Wires the funds required, in addition to any borrowed funds, to pay the purchase price to the escrow agent.
  • Executes mortgages necessary to secure loans.
  • Orders any inspection reports, surveys, hazard insurance, etc. called for by the purchase and sale agreements.
  • Fulfills any other conditions specified in the sales contract and/or by the lender.

The Lender (if applicable)

  • Wires proceeds of the loan to the Escrow Agent.
  • Directs the escrow agent on the conditions under which the loan funds may be used.

The Escrow Agent

  • Creates a file upon receiving a fully executed purchase and sales agreement and/or lender’s instructions.
  • Orders  a search to prepare a commitment for Title Insurance.
  • Orders all necessary payoff statements.
  • Satisfies all requirements to clear the title.
  • Prepares all necessary documents incidental to insuring title.
  • Prepares closing statement.
  • Reviews and explains all closing documents to applicable parties.
  • Obtains all necessary signatures, funds, and documents to close the transaction.
  • Records and delivers all necessary documents.
  • Disburses the funds according to the parties and /or lender’s instructions.
  • Issues the Title Insurance Policy to the purchaser and /or the lender.

What are Escrow Instructions?

Escrow instructions are written documents, signed by the parties giving them, which direct the escrow officer to complete specific steps so the escrow can be closed.