Mor Escrow FAQ

Escrow is a legal concept in which a financial instrument or an asset is held by a neutral third party on behalf of two other parties that are in the process of completing a transaction. The funds or assets are held by the escrow agent until it receives the appropriate instructions or until predetermined contractual obligations have been fulfilled. In a real estate transaction, the escrow officer is basically the person who brings together and coordinates all of the aspects of a said transaction.

An Escrow is generally required in California by lenders, buyer, and sellers. In California, an escrow company can be licensed/regulated by 1) The Department of  Financial Protection and Innovation (independent); 2) The Department of Real Estate (broker owned); 3) the Insurance Commissioner (title company). There are different levels of professional standard requirements for each governing body. An escrow holder as is an independent third party to a transaction, charged with holding funds, deeds and other documents, for delivery from one party to another, when all agreed upon conditions and/or terms have been met.

The selection of the escrow holder is normally done by agreement between the principals in any transaction. If a real estate agent/broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and who is experienced in handling the type of escrow at hand.

Please keep in mind that an escrow officer cannot give legal advice. The purpose of escrow is to carry out the mutual instructions of the buyer and seller. If there are any disagreements between the principals, the escrow officer remains neutral until an agreement is negotiated. Furthermore, the escrow officer will never become involved in the negotiations. Your primary consultant should be your real estate agent/broker if the negotiations have been conducted through them. The escrow officer will often refer you to the real estate agent/broker, legal counsel, or quite possibly a tax adviser.

The closing can take place when all instructions have been complied with and both sides of the transaction have fully performed. After all funds have been collected and costs paid, the property title can be transferred. Parties are not present for closing and once the documents are recorded with the county title is transferred and escrow considered closed. Recorded documents and new title policies will be mailed to you after closing from the county and title company.