Reason 63 - Your Real Estate Agent Provides Safety Net Through An Escrow Account

In any sensitive deal, especially real estate, an escrow facility provides security and safety to both seller and buyer. An escrow usually refers to a third part that is neutral, and is accountable for the transfer or exchange of assets, more often than not, property and money.

Escrow mediators are responsible for an escrow account created for a single transaction between buyer and a seller. Escrow mediators work for an escrow company which is responsible for temporarily housing the account, while the transaction is ongoing.

The purpose of Escrow is to create a centralized, impartial company or agent that monitors on the movement of the negotiation. Once negotiations are closed, all needed documents have been signed by both parties, these documents will be automatically transferred to the escrow account. Documents are kept in the account for safety until the buyer uses the money to purchase and the property title into the escrow account.

 After a certain period lapses, the deal is finalized and escrow is closed, escrow mediators will then release the buyer’s title, thereby bestowing him full ownership of the property. At the same time the seller will receive the money kept in the Escrow account.

The escrow account is utilized as security for both the seller and buyer. In case, both parties encounter problem during the escrow period, the vendor would merely get the title back from the account, while the purchase will get the money deposited. In this way, both of them are free from danger of losing their respective assets.

The escrow account also takes into account all commissions and taxes that need to be remunerated to the state (government) and brokers or agents involved. The escrow account or agent is in charge of the distribution of money, so it is done fairly and with disclosure to all parties involved.

Deals do not have to be done with escrows, yet it is certainly a safer and smarter way to go through a third party escrow for transparency in which the entire deal, documents, and money are accounted for.

Creating an Escrow in every transaction, will serve as the protection of all parties concerned, and guarantees the agent and broker get their commissions and that taxes are paid fairly.

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