Usually it is seen in business and real estate transactions that parties deposit documents, money and property with a third party which is neutral and has no connection with either of the parties. This is the escrow company that collects all the deposits according to the instructions of the agreement between the two parties that are entering into a contract. According to the needs that are different types of escrow accounts. Some of these are mentioned below:
Earnest Money Escrow : This type of escrow money is held till the closing of the deal or in case of any default. Once the deal is closed then the money is disbursed to the seller or in case of a default it is refunded.
The Money and Deed Escrow : These are the short-term escrows that are opened at the closing for a real estate deal. The escrow for this type of deal is typically required to take charge of the land deeds and the documents on behalf of the seller and the purchase money on behalf of the buyer.
Escrow for Moneylenders : Usually lenders deposit the loan money into the escrow account before it is given to the borrower. The proceeds maybe given off to another escrow to a different lender to pay any prior mortgage or the funds may directly be disbursed to the borrower.
Impound Escrow : This type of escrow account is held by, the mortgage lenders so that they can easily collect funds for every payment made for any future purchase of property insurance or payment towards real estate taxes.
Joint Order Escrow : With this type of escrow account the escrow holder can disburse escrow property only when all the parties that are involved in the transaction are ready to sing the instruction on how the property should be disbursed and to whom it should be disbursed.
Regardless of the type of escrow account that you are choosing, it is important that you select the escrow company after a lot of consideration to make your deal successful and free from any problems. Ajeet Khurana
by Ajeet Khurana
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