Agents often have strong feelings about which escrow companies they prefer to use and not use. This usually comes from good and bad experiences they have had throughout their careers. The reality is that besides the Realtor and the Mortgage Broker, the Escrow Agent is the most important person in the transaction process. A good escrow person can head off all kinds of complications. Simply put: An Escrow Officer's job is to follow the instructions of all parties to the contract to close the transaction.
Most Sellers and Buyers rely on their real estate agents to help them decide who to use. So the agent should have a lot of confidence that the escrow agent will do a good job and not make any mistakes, or the agents own reputation will suffer.
A good escrow agent has a natural attention to detail and organization that shows in their files and paperwork. They should have excellent people skills, should communicate clearly, quickly, and often with all parties, and should take pro-active approach to solving any potential problems that they know about. These seem obvious, but in fact this is a rare combination of skill sets.
When considering an escrow company it's probably a good idea to ask the following questions:
- Is the Escrow Officer an LPO? (Licensed Practicing Officer) This designation means they are licensed to practice limited legal functions that can be helpful during the transaction.
- Do any of the parties to the transaction or real estate companies involved have a vested interest in the company? (they will have to disclose the affiliated business arrangement, if they do)
- Do they do signing after hours and on weekends when Buyers and Sellers are usually most available?
- Do they use the same “signing agent” for all transactions?
- Do they do remote signings at no additional charge?
- Will they do a “split escrow”?
This last one (split escrows) are when the Seller and Buyer need or want separate escrow companies to handle the closing. They can be tricky and complicated. There are powerful legal reasons to avoid this scenario whenever possible. There is a risk that escrow will not be able to guarantee free and clear title.
Hopefully your Realtor will have a good working relationship with an Escrow Officer that they are confident in. They should be able to recommend someone that they have had numerous successful transactions with. That's the best testimonial of all.