The Escrow Procedure

When a transaction will be closed in escrow, the buyer and seller choose an escrow agent and execute an escrow
agreement after the sales contract is signed.  This agreement sets forth the details of the transaction and the 
instructions to the escrow agent.  Once the contract is signed, the broker turns over the earnest money to the 
escrow agent, who deposits it in a special trust, or escrow, account.

The escrow agreement requires the buyer and seller to deposit all pertient documents and other items with the
escrow agent before the specified date of closing.

THE SELLER WILL USUALLY DEPOSIT THESE ITEMS:

1) the deed conveying the property to the buyer

2) title evidence (abstract, title insurance, etc)

3) existing fire and hazard insurance policies

4) letter from the mortgage of existing mortgages, setting forth the amount needed to pay the loan
in full, or the exact amount the buyer will assume.

5) affidavits of title (if required)

6) payoff letter (estoppel certificate) if the seller's mortgage is to be paid off.

7) other instruments or documents necessary to clear the title or to complete the transaction.


THE BUYER WILL DEPOSIT THESE ITEMS:

1) the balance of the cash needed to complete the sale

2) mortgage papers, if the buyer is securing a mortgage

3) other documents needed to complete the sale.