The decision of who selects the escrow company in a real estate transaction ultimately comes down to the agreement between the buyer and seller. While it is commonly the responsibility of the buyer to choose the escrow company, this can be negotiated as part of the terms of the sale.
Escrow companies play a crucial role in real estate transactions, as they act as neutral third parties responsible for holding funds and important documents until all conditions of the sale are met. Here is a closer look at the role of escrow companies and some common questions surrounding their selection:
How can the buyer choose the escrow company?
The buyer can choose the escrow company by simply suggesting a reputable escrow company they have worked with in the past or by conducting research to find a well-regarded company in the area.
Can the seller have any say in selecting the escrow company?
Yes, the seller can certainly have input on selecting the escrow company. If the seller has a preferred escrow company or wants to ensure the safety of their funds, negotiating the choice of escrow company is common.
What factors should buyers consider when choosing an escrow company?
Buyers should consider the reputation, experience, fees, and customer service of the escrow company when making their selection.
Is it common for real estate agents to recommend escrow companies?
Yes, it is common for real estate agents to recommend escrow companies based on their previous experiences with reliable and trustworthy companies.
Can the lender have a say in selecting the escrow company?
While the lender may not directly select the escrow company, they may have recommendations based on their policies and past experiences.
Are buyers obligated to use the escrow company recommended by the seller?
Buyers are not obligated to use the escrow company recommended by the seller. It is ultimately up to the buyer to choose an escrow company that they trust and feel comfortable working with.
What happens if there is a disagreement between the buyer and seller about the choice of escrow company?
If there is a disagreement about the choice of escrow company, it is best to address this issue early in the negotiation process and try to find a compromise that both parties are comfortable with.
Can buyers switch escrow companies mid-transaction?
While it is technically possible to switch escrow companies mid-transaction, it can complicate the process and may require agreement from all parties involved.
Do escrow companies vary in terms of their fees and services?
Yes, escrow companies can vary in terms of their fees and services. It is important for buyers to carefully review and compare options before making a decision.
What happens to the earnest money if the escrow company selected goes out of business?
If the selected escrow company goes out of business, the earnest money may be at risk. It is crucial to work with reputable escrow companies to minimize this risk.
Can buyers request to review the escrow company’s credentials and licenses?
Yes, buyers can and should request to review the escrow company’s credentials and licenses to ensure they are working with a legitimate and trustworthy company.
Is it common for buyers to negotiate the fees charged by the escrow company?
Yes, it is common for buyers to negotiate the fees charged by the escrow company. Buyers can inquire about the breakdown of fees and potentially negotiate for lower costs.
In conclusion, while the responsibility of selecting the escrow company may typically fall on the buyer, it is ultimately a negotiable aspect of the real estate transaction. It is important for buyers to carefully consider their options and choose a reputable and reliable escrow company to ensure a smooth and successful closing.