What Is Escrow

What Is Escrow?

During a legal real estate transaction, the buyer and seller are almost always strangers to one another. In order to protect both sides from bad faith actions, a third party will be contractually hired to mediate the real estate transaction from the time an offer is accepted until a deed of trust has been recorded and all monies have been disbursed. A real estate transaction could be the buying of a home, land, commercial building or attached residence where the land is held by another party.

The third party that acts as the mediator is usually an independent escrow company represented by a licensed escrow agent. In the case of a tract home-builder, it is possible that the escrow company shares common ownership. The agent is responsible for coordinating the exchange of documents and money between the buyer, seller and service providers such as appraisers, inspectors and title companies.

While the escrow agent is coordinating the ordering of documents, an escrow account will have been opened for the purpose of collecting and disbursing funds between all parties. The first deposit into an escrow account is usually the amount of the down payment issued by the buyer with the minimum acceptable amount determined by the mortgage company. In some cases, the first deposit might be a good faith down payment to secure the property during price negotiations.

After the loan has been funded by the mortgage company, the loan proceeds are placed into the escrow account. Once the loan has been funded and the legal documents have been signed and given to the escrow agent, the agent starts the process of closing the transaction or escrow. From the combined proceeds (down payment and loan amount), the escrow officer will pay the respective fees to the service providers along with the appropriate commissions, plus any prorated payment requirements such as property taxes, insurance, homeowners' dues and prepaid interest to the appropriate companies. After the escrow agent has paid off everything, including the seller's lender, the remaining proceeds are distributed directly to the seller.

At the end of the process, the escrow agent is responsible for making sure the new title is recorded and all documents are issued to both the buyer and seller. If you are looking for an escrow service company to handle your Southern California real estate escrow needs in a professional and secure manner, consider working with Boulevard Escrow.


We are a highly secure, California licensed escrow company. You can be confident that your transaction will proceed smoothly at every step.

We ensure your escrow transaction is secure and easy.

Contact us today to get started! 800-885-BLVD (2583)

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