EIC Consumer Tips
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 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.
- The Department of Business Oversight scrupulously regulates licensed escrow companies. Each licensee is required by law to be a member of the Escrow Agents’ Fidelity Corporation (EAFC), which provides fidelity coverage for member trust accounts.
- EAFC indemnifies member escrow companies against lost of trust funds caused by employee embezzlement, subject to the limitations contained in the California Escrow Law.
- 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.