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When is a closing agent not an escrow agent?

It is not a trick query. An escrow agent oversees just that – escrow – and a closing agent oversees closings. It is nevertheless confusing for a couple Realtors, however, since the identical particular person often does both equally jobs. After a though, these Realtors start off imagining they are the identical issue.

ORLANDO, Fla. – In finishing 1 of the Florida Realtors contracts, there are areas for the escrow agent’s data, like name, deal with, and phone range. Not only is this data necessary for each 61J2 fourteen.008(2)(b) of the Florida Administrative Code, aka your FREC guidelines, but it lets the customer know exactly where to place the deposit at the time thanks less than the contract.

Different and apart from that part of a contract, there is yet another part that addresses who chooses the closing agent.

The crucial: These are two individual roles.

Pragmatically, however, the identical entity often performs both equally features – and that is why the escrow vs. closing agent concern gets to be confusing – and an assumption people roles are interchangeable is not a good 1.

An case in point of what can go erroneous

Let’s say the customer wants his attorney to keep the deposit and has place the attorney’s data in the acceptable escrow-agent location in the contract. The vendor wants to choose the closing agent and has checked the corresponding box for him to do so.

The contract states the deposit is thanks 3 times after the efficient date, and the customer sends the funds to his attorney as specified in the contract. The vendor, however, contacts the title firm to affirm the deposit and is told that the buyer’s funds is not there. The upset vendor contacts the customer and asks exactly where the resources are. The customer tells the vendor that they ended up despatched to his attorney, for each the contract.

The vendor is upset. He thinks the funds really should be with the title firm he selected as the closing agent. Is the customer in default? Can the vendor demand the resources be put instantly with the title firm?

In short, the response to both equally inquiries is no. Of system, the customer wants to make absolutely sure the deposit is despatched to the closing agent in an acceptable sum of time ahead of closing, but the customer is not in default. If the vendor preferred to have the funds with his picked closing agent, he really should have improved the data in the escrow agent part of the contract considering the fact that the two are not 1 and the identical.

As always, watchful looking at of any contract can often prevent confusion afterwards.

For additional data on confirming that an escrow deposit has been gained, see “Agents Need to Ship Copies of Escrow Checks – Correct?” in the July 17, 2019, concern of Florida Realtors Lawful News.

Meredith Caruso is Affiliate Basic Counsel for Florida Realtors

© 2019 Florida Realtor®