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What Does an Escrow Holder Do?

by Joe Taylor Jr.
CMR Columnist

Every home mortgage transaction requires the assistance of a bonded mediator, known as an escrow holder. This intermediary holds cash collected from a home loan lender during the closing period of a real estate sale. Escrow holders assure all parties that home mortgage funds will not be improperly handled.

Escrow Holder Essentials

An escrow holder is an essential part of real estate sales, home loans, and refinancing transactions. He or she acts as a neutral third party in charge of all cash, deeds, contracts, and other conveyances of value throughout a transaction. All cash and securities are placed in special bank accounts that can only be disbursed by the escrow holder with the mutual consent of all parties involved.

In simple home mortgage deals, an escrow holder may only need to be involved for a few weeks. With more complex sales, involving multiple home loans or deposits, an escrow holder may manage an account for months or even years.

Other Duties of Escrow Holders

In addition to the basic duties of escrow holders, they also do the following.
  • Prepare the escrow instructions, making sure that every condition is made clear and everybody agrees to the terms and conditions of the home loan or real estate sale
  • Order a preliminary title search
  • Ask for a statement or demand from open lenders
  • Arrange the Grant Deed
  • Prorate the costs related to the subject property
  • Keep track of the payments on existing home loans
  • Make a record of the Grant Deed and other important documents
  • Close the escrow as stipulated in the escrow instructions

All home loans require the assistance of a professional escrow holder. Most home mortgage lenders often work with a preferred escrow holder, in order to speed up the closing process. Remember to check the bonding and licensure of your home loan provider's escrow holder before entering a transaction.

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About the Author
Joe Taylor Jr. coaches musicians, entrepreneurs, and other adults that want to shift their careers. He holds a Bachelor of Science in Communications from Ithaca College.

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