Escrow is the depositing of instruments and funds with instructions to a neutral third party to carry out the provisions of an agreement or contract. It is typically used in real estate transactions involving the purchase of a home. In any escrow settlement procedure, both the buyer and seller have certain responsibilities.

What Are The Seller's Responsibilities During Escrow?

Some examples of the seller's legal responsibilities during escrow might include:

  • Obtaining a title insurance policy
  • Paying escrow service fees
  • Paying for drawing the deed and for drawing/recording the reconveyance deed(s)
  • Paying notary fees
  • Paying county (or possible city) transfer taxes
  • Paying any other charges that may have been agreed upon in the contract

What Are The Buyer's Responsibilities During Escrow?

Some of the buyer's legal responsibilities during escrow may include:

  • Obtaining a standard or owner's policy of title insurance (varies from area to area)
  • Paying escrow fees
  • Paying fees for drawing a first or second deed
  • Paying notary fees
  • Payng fees for recording the deed
  • Paying any other charges that may have been agreed upon in the contract

What Are Prorated Responsibilities?

Prorated responsibilities are those that could be performed by either the buyer or the seller. Such responsibilities are prorated (i.e. divided up) between the buyer and seller when they write the contract. They may include:

  • Real estate taxes
  • Association fees (assessment)
  • Improvement assessments
  • Any liens or judgments needed to clear title
  • Unpaid and paid rents
  • Security deposits
  • Impound accounts
  • Real estate broker's commission
  • Any other prorations agreed upon in the contract

Do I Need An Attorney If The Buyer Or Seller In A Real Estate Transaction Has Failed To Perform One Of His Legal Responsibilities?

If you are the buyer or seller in the sale of a piece of property and you feel that the other party has failed to perform or unfairly refuses to perform one of his legal responsibilities, then you should enlist the aid of an attorney. An experienced real estate attorney can properly advise you whether the other party has failed to do something required of him and will recommend a course of action.