What Does an Escrow Agent Do?

By

Michael Roussis

Michael Roussis

Buying or selling real estate in Florida involves many moving parts – inspections, appraisals, title searches, loan approvals, and a stack of documents that could rival a small novel. In the middle of it all is a key player who helps keep everything organized, secure, and fair: the escrow agent.

Whether you are a first-time homebuyer or a seasoned investor, understanding what an escrow agent does can give you peace of mind and help your closing go smoothly.

The Role of an Escrow Agent

An escrow agent is a neutral third party who holds funds and important documents on behalf of the buyer, seller, and/or lender during a real estate transaction. They ensure that no money or property changes hands until all the terms of the purchase agreement or loan documents are met.

Think of them as the referee – they don’t take sides, but they make sure everyone plays by the rules.

Key Responsibilities of an Escrow Agent in Florida

1. Holding Earnest Money Deposits

When a buyer makes an offer on a home, the buyer typically puts down an earnest money deposit to show the seller that the buyer is serious. The escrow agent holds these funds in a secure trust account until closing or until the contract specifies otherwise.

2. Managing Closing Documents

From the deed to the title insurance paperwork, the escrow agent organizes and safeguards all critical documents. They make sure each one is properly completed, signed, and distributed to the right parties.

3. Coordinating the Closing Process

The escrow agent works closely with the buyer, seller, real estate agents, title company, and lender to keep the transaction moving forward. They ensure that all contingencies – like inspections, repairs, or loan approvals – are satisfied before closing day.

4. Disbursing Funds

Once all the closing conditions are met, the escrow agent releases the funds: paying off existing mortgages, covering closing costs, and transferring the remaining balance to the seller.

5. Recording the Deed and/or Mortgage

In Florida, part of the escrow agent’s role may also involve making sure the deed and other required documents are properly recorded with the county, officially transferring ownership to the buyer and placing any mortgage on record.

The Bottom Line

Florida’s real estate laws are designed to protect both buyers and sellers, but the process can be complex. An escrow agent helps prevent misunderstandings, safeguards funds, and ensures the transaction complies with state laws.

The escrow agent acts as the bridge between all parties, keeping the process fair and on track from start to finish. Without this neutral party, there would be more risk of disputes, delays, or even loss of funds.