Working with a client unfamiliar with the term “Escrow”?
Very simply defined, an escrow is a deposit of funds and/or documents to an independent third party whereby disbursement (or release) is contingent upon completion of a particular condition, event, agreement, or contract. It provides assurance for the party depositing that no funds, documents, or property will be released until all contingencies have been met. The escrow agent has a fiduciary responsibility to safeguard until in a position to satisfy all of the terms of the escrow.
Escrow agent should be licensed, bonded, and funds should be held in an Escrow Account at a bank. Upon request, escrow agent should provide a copy of their state license as well as proof of sufficient bonding.
Note: No legal advice or suggestions are being given.
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