Escrow Agent Definition What Does An Escrow Agent Do

Escrow Agent Definition

Explanation

An escrow agent in real estate transactions is concerned with buying or selling a real estate property. It works as a third party that acts neutral regarding the escrow agreementEscrow AgreementAn Escrow Agreement is a financial agreement in which a 3rd party (Escrow Agent) holds an asset of value until all the participants fulfill the specified terms, conditions, & responsibilities in the document. read more. These agents act neutral to trusted third-party transactions that involve parties that are unwary of each other.

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Role

An escrow agent acts as a neutral middleman that is charged with the responsibility of maintaining the escrow accountEscrow AccountThe escrow account is a temporary account held by a third party on behalf of two parties in a transaction. It reduces the risk of failing to oblige the transaction by either of the parties. It operates until a transaction is completed and all the conditions are met.read more. It is also responsible for overseeing the overall escrow process to ensure that all the sales conditions are duly met. Duties include:

Preparation of escrow instructionsActing as a neutral intermediary between the parties involved in a transactionProrationProrationProration is a specific corporate action taken in merger or acquisition, share buyback or stock split. In this, the company offers the shareholders the option to select between cash and equity payout. Based on that, the available stocks are proportionately distributed among them to satisfy the shareholder demand.read more of taxes, insurance, interest, and rentsProcurement of purchase funds from the customersReceiving the loan funds from the customers’ lenderRecording of the deed along with such other related documentsDisbursement of the fundsPreparation of the final statements for the parties that are involved in a particular transactionEnsuring 100 percent compliance with the seller’s requirementsPreparation of the deed and such other documents that are related to escrow agreements;

How to Become an Escrow Agent?

One can choose to become an escrow agent, but it is always advisable to know that it is a responsible job, and it would require aspirants to sit right in front of their desktops for the longest hours. An agent’s job does not require fieldwork, but meeting deadlines and preparing for closing could be very stressful. Therefore, an aspirant must always self-evaluate oneself and confirm if he is ready to accept and face the challenges underlying this profession and fits all the requirements for acquiring the job.

An aspirant must fulfill the following career requirements –

Degree Level – The degree level varies, but still, an undergraduate degree is highly preferred.Degree Field– The aspirant must have a degree in finance, business administration, or any other field that is directly related to the profession of an escrow agent.Experience -The experience may vary, but still, a minimum of one to two years of experience is highly preferred.License and Certification– It is mandatory to have a state license. However, an optional professional certification is also preferred.Key Skills – They must have strong oral and written communication skills, organizational skills, consumer-service skills, client handling skills, and skills in the analysis of written documents.

Steps to Become Escrow Agent

What does an Escrow Agent Do?

They serve as a neutral intermediary between the parties involved in a transaction. He is responsible for requesting a preliminary title search for determining the title status of an asset, ensuring full compliance with the requirements of the lender, preparation of the deed and such other documents that are related to the escrow agreement, proration of the taxes, interest, rents, and insurance, and so on.

Education An aspirant must have the necessary and relevant education. Procure a beginner level job An aspirant who qualifies for the first step must procure a beginner-level job. Obtain licensure concerning escrow After qualifying the first two steps, it becomes mandatory for an aspirant to obtain licensure concerning escrow. Secure the job of an escrow agent In the fourth step, an aspirant would require and secure the job of an escrow agent. Advance the career with proper certification An aspirant will need to advance his career with proper certification in the last step.

An aspirant must have the necessary and relevant education.

An aspirant who qualifies for the first step must procure a beginner-level job.

After qualifying the first two steps, it becomes mandatory for an aspirant to obtain licensure concerning escrow.

In the fourth step, an aspirant would require and secure the job of an escrow agent.

An aspirant will need to advance his career with proper certification in the last step.

An escrow agent in transactions concerning real estate dealings is all about purchasing and selling real estate. Suppose an escrow agent is a title company in a real estate transaction, then in such a case. In that case, the company will need to hold the escrow agreement until and unless the parties meet all the same terms for that particular transaction. In transactions like real estate, would be required to secure the property and examine the related documents to confirm whether both of the parties duly meet the terms of the sale transaction.

Escrow Agent Fees

The fees usually tend to differ from agent to agent and their quality of service and experience in the industry. The negotiation skills of the parties to a transaction, too, can influence the fees.

Escrow Agent vs. Closing Agent

The job of an escrow agent and closing agent might look similar, but in reality, these are poles apart from each other. A closing agent works for an escrow agent or a title company. A closing agent is responsible for holding your deposits in a separate escrow account, preparing closing statements, and obtaining title insurance. A closing agent merely facilitates the transfer of an asset to the buyer from the seller, while the roles and responsibilities of an agent are far way too much.

Conclusion

An escrow company is also known as a title company. An agent can be an individual or an organization, and they are supposed to act neutral and unbiased to the related parties of any transactionRelated Parties Of Any TransactionRelated party transaction is an arrangement between two related parties for the transfer of resources, services or obligations, irrespective of whether a price is charged or can affect the statement of profit or loss and the financial position of an entity.read more. The roles and responsibilities are extensive and never-ending. An escrow agent in real estate dealings is concerned about purchasing and selling real estate property. They would need to secure the real estate property and examine all the documents to confirm if the parties adequately meet the terms of the sale transactions to those transactions or not.