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When parties
speak of "an escrow," or "going into escrow," they generally regard the
"escrow" as a transaction wherein one party, for the purpose of effecting
a sale, transfer, lease of real property, or an encumbrance upon real
property, in favor of another party, delivers a written instrument, money,
or other item of value to a third person, called an escrow agent or escrow
holder, to be held by such third person for further delivery upon the
happening of a specified event or the performance of a prescribed
condition.
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The role of an escrow agent is to be a neutral third party.
The escrow agent's responsibility is to make sure that the terms and
conditions agreed to in a contract are met, and that funds and documents are
disbursed according to the agreement.
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The escrow
agent only acts on mutual instructions and not unilateral instructions
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The buyer and seller are the 'principal' parties to an escrow.
Additional principals may be a bank or other lending institutions.
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All escrows must be confidential, and the greatest caution must be
exercised, especially in the case of telephone conversations, in order not
to disclose information to a party not entitled thereto. Only a principal
can give written authorization to release information to an outside party.
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Evidence of ownership which refers to the quality of the estate; the
right, interest or estate in real property.
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An insurance policy of indemnification protecting the title holder
against flaws and defects in the title as revealed by the public record and
subject to certain printed exceptions.
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