When one buys a piece of land or home, it is only safe for the buyer to find out if the property carries a clean title. There is professional help available out there to do the research and these players will enquire every possibility and act as a neutral third party in the entire deal. Such a third party is called an escrow agent. The transfer of property and payment of money happens through this disinterested third party, who holds the fund and conveyance documents from the buyer and seller respectively until the closure of the transaction. The escrow agent distributes the money, title evidence and the records to the respected persons, once all the requirements in the transaction are fulfilled.
Escrow is a distinct profession in real estate transactions with their own training and accreditation requirements. It is commonly associated with real estate transactions though it is equally applicable in exchanges of non-tangible goods like software as well. In certain nations like Canada, escrow is done by attorneys. But where ever it is, escrow is regulated and is protected through bond or licensing.
An escrow fee is the service fee an escrow agent charges for carrying out the escrow service. There is no state statue or law setting an upper limit to the escrow fee. The fee is normally calculated as a definite percentage of the purchase price and it varies with the local area. Usually, the escrow fees can range from $150 up to $500. It can also go even above this limit. It can vary from state to state or across counties and will be higher in bigger cities than a small town.
It is always better to research the escrow fees of various companies before indulging them in your purchase deal. Requesting the escrow company to send the rates will be time consuming. Hence it is better to look online for escrow rates. It will save a lot of time.
Ask the escrow companies, under which all circumstances they change the escrow fees? (Some companies collect an out-of-office fee if the deal is closed in another location). Compare the escrow fees of 3-4 companies before hiring one. Such an act is sure to save you $100 to $200. While making a quote for escrow fees, be sure to inform them about any special circumstances like the unavailability of one party at the time of closing or any divorce issues that must be dealt with at closing. Such sharing of critical information could help hold the fee near the quoted rate. Also, make yourself clear about the fees you could incur at the time of closing. Find out the charges that come outside the closing fee.
Remember, it is only wise from the customer’s part to be well informed and educated about the escrow fee structure that is vogue. It helps a lot in roping in the right escrow agent. Filing a complaint against an escrow agent can be frustrating. Before one could get the refund, lot of water would have flown under the bridge. Such a law suit could cost you more sometimes as well. Hence research well before you leap!