ESCROW ACCOUNT - HOW WE CAN HELP YOU. 

What is Escrow Account?

Escrow is a way of transferring or exchanging property or money using a neutral third party. Escrow provides the public with means of protection in the handling of funds, assets and/or documents. Escrow enables the buyer and the seller to transact business with each other through a neutral party, thereby minimizing their risk. Escrows are established to hold original documents, real estate deeds, titles to property, money or securities until conditions are fulfilled and the items are released.

In the escrow, all parties involved give their instructions to neutral intermediary, called the "escrow agent" or “escrow manager” whose duty it is to assure that no funds, assets or property will change hands until all instructions have been carried to completion.

An escrow is beneficial to both parties as an escrow agent will be holding the documents, processing all regular payments, maintaining an accounting of all transactions and providing the required reporting. Escrow accounts are designed to facilitate the business and to make seemingly complicated or “impossible’ transactions to become real and performable. Escrow is also useful in ordinary day to day business.

Why Do I Need an Escrow?

Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until all of the instructions in the transaction have been followed. The escrow agent or manager has the obligation to safeguard the funds, assets and/or documents while they are in the possession of the escrow agent, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

What types of transactions go through escrow?

Most contracts that involve the transfer, lease or financing of real or personal property can be placed in escrow. You may be involved in escrow not only when you buy or sell real estate, but also when you make trade deal, sell a business or transfer stock in a closely held business. The buyer or seller should demand the protection of escrow for any transaction which involves a substantial investment.

Escrow can be effective in:

- Contracts and deeds of trust between private parties;
- Safekeeping of documents;
- Holding and releasing of funds for subdivisions, construction;
- Projects and other business transactions;
- Processing of funds related to trade deals;
- Holdbacks and reserves on corporate purchase transactions;
- Holding earnest money and deposits on capital-raising transactions;
- Mergers, acquisitions and buyouts;
- Investment offerings;
- Settlement of claims.

Escrow – How Does it Work?

The principals to the escrow – buyer, seller, lender, borrower, etc. – cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow agent or manager. DeltaQuest Group, being a professional consultancy and law firm, will undertake to act as your escrow agent or manager. We shall provide all information necessary for the preparation of your escrow instructions and legal documents. We use only first class banks to safeguard the funds and assets of the parties to the escrow transaction.

We shall process the escrow arrangement, in accordance with the escrow instructions, and when all conditions required in the escrow are met or achieved, the escrow will be "closed." Each escrow, although following a similar pattern, will be different in some respects, as it deals with your property and the transaction at hand. We shall draft all the paperwork which will be tailor made to your particular case.

Our duties as your escrow agent will include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms stipulated in the escrow are satisfied; distribute or pay the funds in accordance with instructions and provide an accounting for same in the Closing or Settlement Statement.

What is needed to set up an escrow account?

Parties to the escrow need properly executed agreement. On traditional escrows the agreement may be a contract for deed, trust indenture, mortgage, or buy/sell agreement. In addition, the parties will complete drafted by DeltaQuest Escrow Agreement which shall document parties’ name and other important information, legal documents received, payment amount and frequency, interest rate and disbursement instructions, fees, and terms and regulations of the agreement.

Escrow and real estate transactions.

Very often to finalize the sale of the real estate successfully a neutral, third party escrow agent is engaged to assure the transaction will close properly and on time. The escrow agent insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring your clear title to your property before the purchase price is fully paid. The documentation the escrow holder may be collecting includes:
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies or title guarantees
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds.

Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the seller and appropriate title insurance or guarantee is issued as outlined in the escrow instructions. At the close of escrow, payment of funds shall be made in an acceptable form as per escrow instructions.

We invite you to contact DeltaQuest Group to learn more how we can assist you to set up Escrow account and to safeguard your legal rights and financial interests.