What Is An Escrow Officer?

An escrow officer is an unbiased third party who ensures a real estate transaction is correctly carried out by a homebuyer, home seller and any real estate agents involved in the purchase or refinance of a home. Escrow officers oversee the terms of a contract, and that they are honored by all parties. An escrow officer plays an important role in the homebuying and refinancing process.

What does an escrow officer do?

An escrow officer acts as a sort of middleman between all the parties if you’re buying or refinancing a home. Depending on the laws in your area, an escrow officer may be an attorney or a title company officer. Escrow officers typically handle the following tasks:

Depositing and handling escrow funds. When you buy a home you’ll typically make an upfront “earnest deposit” as a good faith commitment to the seller. The escrow officer deposits these accounts in an escrow account until the transaction is completed.

Ordering title and property-related documents. The escrow officer works with a title agency to issue title commitments, verify property tax bills and prepare mortgage documents for closing. They also work with a title officer to address any issues that could affect your ability to get title insurance.

Notifying all parties if there is a title problem. If a title search reveals any title problems such as judgments or tax liens, the escrow officer will contact the seller and any agents to resolve the issue. If you’re refinancing, the escrow officer will help obtain the documents the lender needs to pay off any loans you may currently have.

Keeping everyone informed about closing timelines. Escrow officers keep an eye on closing timelines to make sure a home purchase closes on time, or a refinance closes before your rate lock expires. They often communicate with multiple parties including sellers, real estate agents, loan officers, title agents and local recording offices.

Ensuring loan and contract paperwork is signed correctly.  Mortgages and purchase contracts must be signed, dated and notarized according to federal and state laws, and escrow officers oversee the closing process to avoid delays at the end of a transaction.

Disbursing closing funds and submitting documents for recording. The escrow officer tracks funds from your lender and pays money to sellers, real estate agents, lenders according to the instructions provided in the paperwork. They may also submit signed documents to the recorder’s office to finalize the transfer ownership of a property into your name.

Who chooses the escrow officer?

Lenders and real estate agents often have business relationships with title companies and choose an escrow officer on your behalf. However, escrow and title services are listed as “services you can shop for” on your loan estimate, which means you have the right to shop for the best deal on escrow and title fees.

On a purchase transaction, the escrow officer is chosen based on negotiations in your purchase contract. With a refinance, you’re entitled to choose whomever you prefer. You may receive an extra discount on refinance escrow services if you return to the person who handled the escrow on your home purchase.

FAQs about escrow officers

• Who does an escrow agent work for? Escrow agents may work for a title insurance company, real estate attorney, as an affiliate of a lender or as an independent escrow company. However, they do not work for the buyer or seller and must remain neutral in any real estate transaction.
• How do escrow officers get paid? Escrow agents usually earn a salary. Unlike real estate agents and loan officers, they aren’t paid based on a percentage of the sales price or loan amount.
• What’s the difference between an escrow officer and a title officer? A title officer researches legal records to find anything that could affect your ownership rights in the future. An escrow officer coordinates the paperwork and communications between everyone in a purchase or refinance loan and directs funds to the right people at the right time.
• What is an escrow assistant? An escrow assistant often helps with basic clerical and administrative tasks during a transaction. They may help with opening an escrow, emailing parties with status updates and help schedule closings.