Escrow provides safety
It is highly recommended that you ALWAYS use escrow when conducting a real estate transaction. No professional would ever recommend you do it without, and it’s almost never done. If you found a willing buyer and a willing seller, however, you are not required to use escrow.
According to Jason Annotti, Escrow Officer with Chartwell Escrow in Sherman Oaks, CA, “Escrow provides a level of safety to all parties involved and ensures that all parties perform their obligations under a Purchase and Sale Agreement.” That is why you never see transactions without escrow.
Read the full interview with Jason Annotti at: What is escrow? Interview with Escrow Officer Jason Annotti?
What does an escrow officer do?
Before choosing your escrow officer you need to understand what an escrow officer really does. Nicole Phillips, Escrow Officer with Advantage Tile in Westlake Village, CA says “Escrow is the neutral third party between the buyer and seller in a real estate transaction. We hold the funds to pay the bills at the close and affiliate the loan document signing.” They perform a multitude of tasks from ordering payoff demands on existing liens, to preparing preliminary/final closing statements (HUD-1 forms), and getting the transfer recorded on title.
Who chooses the escrow officer?
The escrow officer is chosen in the standard California Association of Realtors California Residential Purchase Agreement and Joint Escrow Instructions (the standard purchase agreement used in the state of California on 1-4 unit residential properties). Generally, your broker will recommend you write it up as “seller choice” or “any reputable company”. This is because it’s typical to let the seller choose the escrow company. It’s their property, so it generally adds a level of comfort for the seller.
This, of course, is not a requirement. You should feel free to name your own escrow company in the purchase agreement; just understand that it will affect your offer.
How Do I Find an Escrow Company or Officer?
Seek Referrals. Nicole Phillips says “The easiest way to find an Escrow Officer is through your Real Estate Agent. Your Agent usually has a team of affiliates assembled to assist in making the transaction as smooth as possible for everyone involved. You can of course find a Title and Escrow company online.”
If you found your real estate broker at CAPropertyFinder.com they’ve completed 10s-100s of properties in the last 12 months. They know a lot of escrow officers and have worked with both the best and worst. Friends, family members and neighbors may be able to recommend a good one from a previous real estate transaction.
Just like with anything you can always “Google it”. Search for an escrow officer who is local. As with real estate brokers, you want someone familiar with the area. With escrow, this is very important. Cities, counties and municipalities have different rules about everything. Some charge fees for things such as water/sewer certifications, retro-fits, transfer taxes and many more. A local escrow officer will not miss items like this and therefore not delay your real estate transaction.
What Should I Look For in an Escrow Officer?
- Licensed with the California Department of Corporations.
- One Who “Works Like You” – If you prefer email to phone calls, your escrow officer should be very willing to do that. If you are only available on nights and weekends, see if you can get an escrow officer who also can also work with your schedule.
- Organization – This is the most important trait an escrow officer can have. They have various events and transactions to coordinate in different locations, with different people, who use different processes and different time lines. An escrow officer MUST be organized.
Read the full interview with Nicole Phillips at: California Escrow Officer – Interview with Nicole Phillips
Now that you’ve secured financing, assembled a team, and prepared for buying a home, the next step is to find the home.
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