Non independent Escrow Broker

[Evee71]

We have an offer accepted on a home we'd like to purchase in OC; however we noticed the listing agent and the escrow broker share the same office. Is this typical in OC?

 

[usctrojancpa]

We have an offer accepted on a home we'd like to purchase in OC; however we noticed the listing agent and the escrow broker share the same office. Is this typical in OC?

Some listing brokers also own an escrow company, not uncommon with larger real estate brokerages.

 

[Evee71]

Isn't it not a neutral or third party if it's in house?

 

[usctrojancpa]

Isn't it not a neutral or third party if it's in house?

Whether the escrow company is owned by the listing broker or not they are required to ask as an independent 3rd party to both the buyer and seller.  All escrow companies are licensed by the Department of Real Estate in CA.

 

[Evee71]

Thanks. So even though they classify themselves as non independent, they have to act as if they are independent?

 

[usctrojancpa]

Thanks. So even though they classify themselves as non independent, they have to act as if they are independent?

That is correct, they are not independent because they are affiliated with the listing broker not because they will favor the seller over the buyer.

 

[Liar Loan]

In my experience, this situation means the seller will get a break on escrow fees, while the buyer will be charged the full amount.  I have benefited from this arrangement on multiple sales.  One of my investment properties sales cost me nothing in escrow fees, which was great.  The buyer paid it all without knowing.

 

[Evee71]

Ughh. Now i get why they insisted on using them. As a buyer, is there anything i can do to not pay all the escrow fees?

In my experience, this situation means the seller will get a break on escrow fees, while the buyer will be charged the full amount.  I have benefited from this arrangement on multiple sales.  One of my investment properties sales cost me nothing in escrow fees, which was great.  The buyer paid it all without knowing.

 

[usctrojancpa]

Ughh. Now i get why they insisted on using them. As a buyer, is there anything i can do to not pay all the escrow fees?

In my experience, this situation means the seller will get a break on escrow fees, while the buyer will be charged the full amount.  I have benefited from this arrangement on multiple sales.  One of my investment properties sales cost me nothing in escrow fees, which was great.  The buyer paid it all without knowing.

The seller (typically the listing agent/broker) selects the escrow company. You won't pay the seller's escrow fee, you'll just pay your own escrow fee  (typically around 0.20% to 0.25% of the purchase price for each side) and not both the seller and buyer escrow fees.  What LL is talking about is getting an escrow fee discount on the seller escrow fee which some escrow companies do like the ones that I work with. 

 

[Liar Loan]

Ughh. Now i get why they insisted on using them. As a buyer, is there anything i can do to not pay all the escrow fees?

In my experience, this situation means the seller will get a break on escrow fees, while the buyer will be charged the full amount.  I have benefited from this arrangement on multiple sales.  One of my investment properties sales cost me nothing in escrow fees, which was great.  The buyer paid it all without knowing.

The seller's agent typically picks the escrow company, but it is negotiated as part of the purchase contract.