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.
