Commonwealth Title
HOME | ALL ABOUT TITLE | ALL ABOUT CLOSING | SMART MONEY | GLOSSARY | ABOUT US | BOOKMARK

LENDERS
and other customers obtaining quotes for Loan Estimates and/or Good Faith Estimates must use the link below

Click here for Residential Title & Settlement rate quotes    

TITLE INSURANCE RATE QUOTES ONLY
National Rate Calculator

Enter your zip code

Online quotes are not available for the IA, IL, IN, KS, MO and OK.

Find a Title Company:
Learn more about the title companies in your area.
Enter your zip code:


Other Languages
All About Title - What Is Escrow?

All About Title - Overview
All About Title - What Is Title?
All About Title - What Is Search?
All About Title - What Is Escrow?

What Is Escrow?

An escrow is an arrangement in which an objective third party, called an escrow holder, 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, selling and refinancing real estate often open an escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed to the property until the seller's requirements, including receipt of the purchase price, are met. Both rely on the escrow holder to carry out faithfully their instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.

An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds, and many other items, using the escrow holder as the central point of contact. 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.

 

  What Is Escrow?