What is escrow?

In Arizona, the process of closing a real estate transaction is generally handled by an escrow company.  These companies are disinterested third parties that act as intermediaries for the buyer and the seller in order to make sure that the transaction closes as quickly and efficiently as possible.

It is not all uncommon for the escrow company to also issue title insurance for the transaction.  This dual role expands the duties necessary for an escrow agent to close a transaction.  

The escrow agent is responsible for ensuring that all documents have been completed properly, including those related to the title search and title insurance. It is his/her responsibility to explain all of the closing documents to you, obtain the necessary signatures to make the transaction legal, and collect the necessary money to disperse to the appropriate parties at time of closing.

Escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds and many other items, using the escrow company as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow company can take many actions on their behalf without further consultation. This saves time and facilitates the closing of the transaction.