Following Instructions

This may seem obvious, but serving as an Escrow Officer is really just about following instructions.

Specifically, an Escrow Officer can do only those things for which he or she has written instructions.

Put another way, an Escrow Officer should not do anything that is forbidden in the written instructions, nor anything that is not addressed in the written instructions.

When an Escrow Officer violates these principles, he/she can get into trouble, including incurring the wrath of one of the parties to the deal.

The basic duties for an Escrow Officer arise out of the Purchase and Sale Agreement as made between the Buyer and Seller.

Escrow Instructions are made between the Escrow Agent (on the one hand) and the Buyers and Sellers (on the other hand).

If the Purchase and Sale Agreement leaves anything open to question, the Escrow Officer's duty is to contact the parties and request written clarification (usually in the form of an addendum to the Purchase and Sale Agreement)

The new mortgage lender also deposits its written instructions with the Escrow Agent, which address the lender's requirements in the transaction.

Sometimes these different, separate sets of written instructions do not agree. What to do? The Escrow Agent must then stop further closing activity until all the parties can come to agreement and provide consistent written instructions.

Unfortunately, the age of doing things on a handshake or a "gentleman's agreement" are gone.