Posts Tagged ‘real estate sales’

Protect Yourself: What You May Not Know About Escrow Companies

Wednesday, November 15th, 2017

Most people know that escrow is the party that handles the money, paperwork and closing details of a transaction in California (and other states – the remaining states use attorneys for closings). But many do not know that escrow and escrow officers can fall under two regulatory categories, and that this could have an effect on their duty to remain a neutral party to both sides of a property sale.

2 Types of Escrow Companies in California

Independent or licensed escrow companies are independent companies that are licensed by the California Department of Business Oversight (DBO), which are governed by strict regulations designed to protect consumers.

Some of the requirements of independent escrow companies are that they are subject to management and bond requirements, are trust fund insured, are subject to annual financial and procedural audits and Department of Justice investigations of all employees, as well as escrow license requirements.

Controlled, or non-independent, escrow companies are nonlicensed businesses owned by third parties, such as real estate brokerages, attorneys, banks or title companies. These controlled companies are regulated by different licensing and regulatory authorities, which can vary amongst jurisdictions and are not governed as strictly as independent escrow companies.

Escrow officers have a difficult role in that they need to represent both parties in a property sale transaction while remaining neutral. An independent escrow company is the best choice, in my opinion, for real estate parties and clients, as there is more protection offered and there is not the threat of compromised neutrality.

 

 

Share
RSS Feed

Carbon Monoxide Detectors: Are Sellers Liable?

Wednesday, October 19th, 2011

You may or may not have heard that as of July 1, 2011 carbon monoxide detectors must be installed in every single family residence. So, what is your liability if you are a seller – do you have to install them before the close of escrow?

While it is true that carbon monoxide detectors must be located in every home, it is not a requirement to install them in order to close escrow. However, the seller is responsible for disclosing in the Transfer Disclosure Statement (TDS) whether or not the home has carbon monoxide detectors installed.

Keep in mind that if you do not install them in your home you are technically in violation of the law – but whether that would actually be enforced is anyone’s guess (I suspect local law enforcement officers have better things to do).

If you are a buyer and would like the seller to install the detectors during escrow you can ask your agent to write that into your contract. If you are a seller, my advice to you is to spend the money on carbon monoxide detectors and forget about it – there are some great deals if you check. I recently purchased a set of two for about $20.

Share
RSS Feed