NEWS

EIC Consumer Tips - 2.15.2009

Independent, licensed escrow companies are the first line of defense for homebuyers and property owners. Savvy real estate consumers know that buying or selling property doesn’t stop with finding the right buyer or the right investment. And yet, escrow remains one of the least understood elements of the real estate process. 

Licensed escrow companies are consumers’ best bet for safeguarding their funds.  That’s why it’s so important to work with an escrow officer who has met strict licensing requirements of the California Department of Corporations and has undergone a background check and fingerprinting by the Department of Justice. 

Accountability

Licensed escrow companies are required to complete a financial audit every year to ensure compliance with California regulations, and all licensees are subject to random, surprise examinations by the Dept. of Corporations.

Security

The Dept of Corporations scrupulously regulates licensed escrow companies.  Each licensee is required by law to be a member of the Escrow Agents’ Fidelity Corporation, which provides fidelity coverage for member trust accounts in the amount of $5 million.  This fidelity bond guarantees that, in the event of theft of trust accounts, consumer funds are protected.   

Safety

All employees must submit to California Department of Justice fingerprinting and criminal background checks. 

You have the right to select your own escrow officer.

That's right, smart consumers can help in the selection of their escrow officer by investigating those companies themselves rather than leaving this important decision to their realty agent or lending institution.

Here’s a checklist to help you choose the right escrow officer for your real estate purchase:

Ask your realty agent to make three recommendations for both escrow service and title insurance, and ask why the agent likes these companies.

For escrow, determine whether a company is truly acting as a neutral party, or is under the control of a realty agent or mortgage broker.

Remember that price is not the only consideration, attention to your specific needs and good service can and in most cases should be more important.

Contact the state agency that regulates a company to determine if there are any pending complaints or disciplinary actions.

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