noun: escrow; plural noun: escrows


a bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled.

  • a deposit or fund held in trust or as a security.

    "an escrow account"

  • the state of being kept in custody or trust.

    "the board holds funds in escrow"

verb: escrow; 3rd person present: escrows; past tense: escrowed; past participle:escrowed; gerund or present participle: escrowing


place in custody or trust.

Escrow: What is it?

Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law: Section 17003 of the Financial Code: provides the legal definition.

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 holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

Escrow: How Does it Work?

The principals to the escrow: buyer, seller, lender, borrower: cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, he will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.

The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be 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.

The duties of an escrow holder 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 funds in accordance with instructions and provide an accounting for same : the Closing or Settlement Statement.

Who Chooses the Escrow?

The selection of the escrow holder is normally done by agreement between the principals. If a real estate broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and who is experienced in handling the type of escrow at hand. There are laws that prohibit the payment of referral fees; this affords the consumer the best possible escrow services without any compromise caused by a person receiving a referral fee.


Why Choose United Escrow Company

Independent Escrow vs. Non-Independent Escrow                               

UNITED ESCROW RE Broker Owned Escrow Title Co. Escrow
Regulated by Dept. of Business Oversight Dept. of Real Estate Dept. of Insurance
Bonding Required YES NO NO
Escrow Experience
Required for Manager
YES (5 Years Minimum) NO NO
Regulatory Audits YES NO NO
Independent Audits YES (Every Year) NO NO
Deposit Funds Protections YES (Covered by Escrow Agents Fidelity Corp. up to $5MIL) YES (D.R.E Recovery Fund:Maximum $25,000 per individual) NO
Net Worth Requirements YES NO NO
Liquidity Requirements YES NO NO
Escrow License Required YES NO NO
All Employee's Background
YES (Fingerprint
by Dept. of Justice)
True Impartiality as a 3rd Party YES Doubtful (Broker has financial
interest in transaction)
Doubtful (Title Co. has interest in trans.)