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Who owns the money in an escrow account? The buyer in a transaction owns the money held in escrow. This is because the escrow agent only has the money in trust. The ownership of the money is transferred to the seller once the transaction's obligations are met.
An escrow agreement is a legal document outlining terms and conditions between parties as well as the responsibility of each. Agreements usually involve an independent third party called an escrow agent, who holds an asset until the contract's conditions are met.
The buyer and seller specify the conditions that must be met for closing to occur in a contract called escrow instructions. Escrow instructions are legally binding on an escrow agent. The agent must follow the instructions of not only the buyer and seller, but any other parties to the escrow.
An escrow disbursement is a payment made from an escrow account. With real estate, it's made by the lender on behalf of a borrower to cover property taxes and homeowners insurance.
When signed, which one of the documents below becomes the actual escrow instructions? The Purchase Agreement, when signed, becomes the actual escrow instructions. A section of the Purchase Agreement is called Joint Escrow Instructions to Escrow Holder.
The escrow instructions define the events and conditions that must take place and the manner in which the escrow agent shall deliver or release to the beneficiary of the escrow the assets, documents, and/or money held in escrow. The escrow instructions are commonly contemplated by the escrow agreement.
For those in California, typically the California CAR Residential Purchase Agreement is also the joint escrow instructions from the parties to escrow. Sometimes additional escrow instructions are needed to finalize the transaction.
The escrow instructions give the escrow holder the authority to act, telling the escrow holder what to do and when to do it. They indicate all of the specific steps to be completed (and conditions that must be satisfied) before the escrow is complete.