What is a warranty agent?

Definition and Examples of Escrow Agents

An escrow agent is a third party or neutral person who manages the property in an escrow account. The escrow agent protects the property in the escrow account during real estate transaction processes. In its role as a third party, the escrow agent is responsible for signing certificates, processing paperwork, explaining available services to potential buyers, and approving and distributing funds in the final steps of closing.

How Escrow Agents Work

Let’s say you and your spouse are looking to purchase property. You have found the perfect place, made an offer, and signed the purchase agreement. At this stage, you also submit the earnest money – a deposit towards the purchase – which is placed in the escrow account.

The escrow agent will assist you with the completion of the transaction, including conducting a preliminary title search; ensuring all loan requirements are met; guaranteeing that all contract conditions are fulfilled; and handling the funds from both of you and the lender, among other matters.

Once the escrow agent verifies that everything is satisfactorily completed, they can close the escrow account, record the deed, and distribute all funds.

Do I Need an Escrow Agent?

Legally, it is not necessary to hire an escrow agent. However, in real estate transactions, it is advisable to do so. The escrow agent takes on many duties to facilitate the closing process. Without an agent, the process can become very complicated, and it is easy to miss important details. As an escrow agent, the escrow agent looks after the interests of both the buyer and the seller.

Although there are no specific rules about who should pay the escrow agent fees, costs are typically split between the prospective home buyer and the seller. You can negotiate these fees so that they are fully paid by one party.

Source: https://www.thebalancemoney.com/what-is-an-escrow-agent-5201300