Chapter 8: Escrows and Title Insurance Flashcards
I. The role of a transaction coordinator in the escrow process
What is a transaction coordinator?
A TRANSACTION COORDINATOR (TC) is a real estate professional who assists agents and brokers in the processing of a real estate transaction all the way through escrow.
A Transaction Coordinator (TC) prepares a checklist of all the files and documents that an agent/broker needs to facilitate a smooth transition into escrow.
II. Escrows in general
What is the purpose of an escrow?
The purpose of an escrow is to ensure that the terms of the transaction are met.
II. Escrows in general
When is an escrow created?
An ESCROW is created when a separate written agreement instructs a neutral third party to hold funds and only proceed when all the agreed to conditions have been performed.
II. Escrows in general
The Escrow Act is found in which code?
Financial Code
II. Escrows in general
What are the 3 requirements for a valid escrow?
- Signed escrow instructions, forming a binding contract between two or more parties(usually a buyer and seller).
- A neutral party, which is the escrow company, acting as a dual agent of the buyer and seller.
- Conditional delivery of funds and documents when all the conditions in the escrow are met.
II. escrows in general
Who can be an Escrow Holder?
An escrow holder can be:
1) a corporation,
2) an attorney,
3) a real estate broker who acts as an agent representing one or both parties to a transaction.
II. escrows in general
A NEUTRAL DEPOSITORY is an escrow business conducted by a licensed escrow holder.
II. escrows in general
An ESCROW OFFICER, HOLDER, or AGENT, though not licensed by the state, is an employee of a escrow company who acts as the agent.
II. escrows in general
The complete sequence of events in an escrow is:
- Preliminary title search and report
- Lender’s demand (amount owed, pay-off statement)
- Request for new loan documents
- Completion of conditions and depositing of funds
- Adjustments and prorations
- Transfer of existing fire policies or creation of new ones
- Recording and issuing of title policy
- Disbursement of funds
- Escrow statement sent to each party
III. How escrows work
Escrow amendments must be signed by the parties to change the escrow.
III. how escrows work
The escrow is complete when:
1) all conditions of the escrow have been met;
2) all conditions of the parties have been met; and
3)the parties have received an accounting of the procedure.
III. how escrows work
If both parties mutually agree to change the instructions, the change can be put into effect at any time. However, if a dispute should arise, the escrow company will not proceed until both parties come to terms.
III. how escrows work
What is 3 ways to terminate an escrow?
1.Complete Escrow
2.Mutual Agreement
3.Court Action (Interpleder)
