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An "escrow" is an arrangement in which a disinterested third party, called an escrow holder (commonly referred to as a Closer), holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's, seller's and lender's instructions.

People buying and selling real estate often open an escrow for their protection and convenience. The buyer can instruct the closer to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the closer to retain possession of the deed until the seller's requirements, including receipt of the purchase price, are met. Both buyer and seller rely on the closer to carry out faithfully their mutually consistent instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.

An escrow is convenient for the buyer and seller because both can move forward separately, but simultaneously, using the closer as the central depositing point. If the instructions (contract) from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, then the escrow holder can take many actions on their behalf without further consultation. This saves much time and facilitates the closing of the transaction.

There are two important reasons for selecting an established, independent escrow firm; (a) real estate transactions require a tremendous amount of technical experience and knowledge; and (b) the closer will generally be responsible for safeguarding and properly distributing the purchase price and deed. The closer must retain completely impartial throughout the entire escrow process and follow instructions of both parties without bias.

Escrow instructions are written documents – typically the Real Estate Sale Contract signed by the interested parties, which direct the escrow officer in the specific steps to be completed so the escrow can be closed. Since the closer can only follow the instructions, and may not exceed them, it is extremely important that the contract be stated clearly and be complete in all details.

The method for dividing the charges for the service performed through escrow must be stated. Unless there is some special agreement between the buyer and seller as to how these charges are to be paid, local custom will generally be followed.



  • deposits the executed deed to the buyer with the closer
  • deposits other required documents such as tax receipts, address of mortgage holders, social security number(s) and forwarding address necessary for IRS reporting
  • deposits funds, if proceeds are not enough to complete the costs of the transaction
  • the seller must bring current government issued photo ID to the closing


  • deposits the funds (cashier check or wire transfer) sufficient to complete the transaction
  • executes and deposits note, mortgage/deed of trust and other necessary documentation to secure loan
  • fulfills any other conditions specified in the escrow instructions and/or lender instructions
  • the buyer must bring current government issued photo ID to the closing


  • deposit proceeds of the loan on behalf of the purchaser
  • directs the closer on the conditions under which the loan funds may be used


  • opens the order for title insurance
  • receives funds necessary to facilitate the transaction
  • prepares final closing documents which includes the deed, affidavits, etc.
  • prepares final settlement statement for each party, indicating amounts necessary to close escrow
  • disburses funds for real estate commission, lien clearance, inspection fees, title and recording fees, etc
  • records deed and mortgage/deed of trust
  • delivers deed to the buyer, proceeds to the seller, mortgage/deed of trust to the lender


The closing is the meeting, usually held at the closer's office, where final documents are reviewed and signed - and where funds are deposited to complete the transaction. Instead of a formal closing meeting, Kansas City Title offers flexibility in the closing process by scheduling the buyer and seller at separate times that are convenient to their schedules. The seller's closing appointment, which usually lasts about 30 minutes, typically occurs a few days prior to the closing date.

Once all the terms and conditions of the instructions of all parties have been fulfilled, the escrow is closed and the safe and accurate transfer of property has been accomplished.


If you are the buyer, be sure to bring the following to the closing:

  • A current government issued photo ID such as a passport, driver’s license or military ID card.
  • A cashier’s check, certified check, or wire, made payable to your escrow company, for the amount specified by your escrow officer. This amount usually includes the balance of your down payment, closing costs and recording fees.
  • Your personal checkbook so if any changes come up, you can write a personal check to cover them.
  • A copy of your new homeowner’s insurance binder if not already provided to the escrow prior to this meeting.

If you are the seller, please bring:

  • A current government issued photo ID such as a passport, driver’s license or military ID card.
  • Your social Security number for 1099 reporting.