An escrow is an arrangement on which a neutral third
party, called an escrow holder, holds legal
documentation and funds on behalf of a buyer and
seller. The escrow agent works closely with you, your
realtor and lender to assure that the sale conditions
are complied within the time period called for in the
Residential Purchase Agreement and Joint Escrow
Instructions. After all parties have executed these
documents, escrow prepares an Addendum to the
Residential Purchase Agreement and Joint Escrow
Instructions. Escrow then distributes them according
to the buyers and sellers instructions. Both the buyer
and the seller rely on the escrow holder to carry out
faithfully their mutually consistent instructions
relating to the transaction. Escrow holder is bound by
law to notify both parties if the instructions given
are not mutually consistent or cannot be carried out.
These instructions are drawn by the Escrow Officer,
and signed by the buyer and seller. Since the escrow
instructions are not as detailed as the Purchase
Contract, the information contained in the
instructions is intended to direct the Escrow Officer
in the specific steps that are to be completed through
the escrow instruction.
