Once you and the seller have signed the contract, it will be delivered to a neutral third party – the escrow company.

The escrow company is usually chosen by the seller, usually on the advice of his agent. But no matter who chooses the escrow company, the escrow officer doesn't actually represent either side. The escrow officer is a neutral third party who is responsible for preparing the papers needed for a legal closing. This will include getting documents signed and delivered, complying with the lender’s instructions, ordering a title report, preparing the closing documents as directed by you and the seller, and recording the title at the county courthouse. 

When the escrow is opened, the escrow officer’s job is to follow written instructions. For instance, your contract will have contingencies for cancelling the escrow such as poor inspection reports, a cloud on title, or problem with your loan approval.  Hopefully, the escrow will go close smoothly. If, however, the escrow officer ever gets conflicting instructions from you or the seller, the escrow will stop moving until the argument is resolved and clear instructions are given.

What kind of dispute? It could be as simple as a possession date, or it might be a repair issue based on the inspection report. The escrow officer will abide by the written word of the contract. This is your firm agreement, and the contract is intended to prevent disputes by keeping the transaction clear.

One advantage your could have is by getting to know your escrow officer. Either call or visit at her office and introduce yourself. Offer your cooperation in a smooth escrow. A little consideration and respect in the beginning will help things go smoothly if the escrow hits a rough patch.

Here are the 3 most common problem areas:

 1. TITLE REPORT. Shortly after escrow is opened, you will receive a preliminary title report. This shows legal information such as the current owner and what is owed on the property such the mortgage and tax liens. Look it over carefully. Ask your escrow officer to explain anything you don’t understand. For instance, what would you do if the seller owes more than you’ve offered?

2. CLOSING COSTS. Early in the transaction, get an idea of how much money you’ll have to come up with at closing. Ask the escrow officer to prepare a statement showing your estimated closing costs. Even though you won't have actual costs until the end of the escrow period, at least you’ll have an idea so there are no surprises. Most escrow companies include some padding in their numbers.

If you find that you'll need additional funds prior to closing, use certified funds to avoid delays. If your money is tied up in a money market fund or retirement account, find out how to wire the money directly to the escrow company.

 3. CLOSING STATEMENT. Check this final statement carefully line-by-line to make sure it correctly shows all the debits and credits, and there are no junk fees or double-charges.