Frequently Asked Questions
An escrow is a deposit of funds by one party for the delivery to one or more parties upon completion of specific conditions or events. It is a neutral third party protecting the interests of all parties in the transaction. The open escrow is a repository for all monies, instructions, and documents necessary for the successful completion of a transaction involving two or more parties. The California Escrow Law – Section 17003 of the Financial Code – provides the legal definition.
An escrow account will guarantee that no funds or property change hands until ALL of the terms and conditions are met. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder and to disburse funds and/or convey title only when all provisions of the escrow instructions have been met.
We manage escrows with two or more parties (seller, processor, buyer) and one or more brokers who bring the parties together. Any one of these parties can open the escrow once terms are agreed upon. This is conveniently done at VES through Client Bridge which also enables the parties to monitor the progress of the escrow and upload documents as needed.
The length is determined from open to close by the terms of the Memorandum of Understanding and the escrow Instructions. This can range from a few days to several months depending on the structure and complexity of the deal.
An escrow closing is the conclusion of the transaction. Once all the conditions of the escrow instructions have been satisfied, the escrow officer informs the parties of the date that escrow will close. A final audit and accounting are completed, and the funds are wired transferred from the VES trust account according to the details of the final settlement statement.
Escrow cannot be completed until the instructions have been fully satisfied and all parties have signed escrow documents. When all conditions required in the escrow are met and funds disbursed, the escrow is “closed”.
The principals to the escrow reach an agreement in writing. This may be done initially with a “Letter of Intent” which would be followed by a more binding “Memorandum of Understanding” or other contract. These are signed and delivered to the escrow officer. The details of these documents along with conversations with the parties provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.
The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow have been met, the escrow will be “closed.” Each escrow, although following a similar pattern, will be different in some respects.
The duties of an escrow holder include; following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the escrow instructions; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all the terms of the escrow instructions are complete; providing an accurate accounting and disbursement of all funds as documented in the “Settlement Statement”. See also the Escrow Process page.
• Prepares documents and specific instructions
• Manages the funds and/or documents in accordance with instructions
• Pays all bills as authorized
• Responds to requests from the principals
• Closes the escrow only when all terms and conditions have been met
• Distributes the funds accordingly
Escrow should be opened as soon as ALL parties come to an understanding – typically expressed in a document like a “Letter of Intent”.
No two escrows are exactly alike. An escrow can take from a few days to several months depending on the parties involved and the complexity of the deal. In a transaction with a processing lab involved, it will depend on the amount of biomass and the time necessary to process all of it.
The escrow fees will be paid according to our disclosed fee schedule. Please see Fees page. The total amount is typically prorated among the primary parties – seller, processor, and buyer, but the amounts paid by each party is subject to negotiation and will be detailed in the escrow instructions.
If there is a dispute between the parties, the escrow officer can only follow escrow instructions as written, or modifications approved by the parties. Escrow officers in California are forbidden from favoring any party in an escrow transaction. If there is a dispute and the parties cannot reach a resolution, the escrow officer will stop processing the escrow. Funds in the trust account will not be disbursed until the parties can agree and sign amended escrow instructions. Without a resolution the matter may need to be decided by the courts.
Although we offer telephone and email support, the safest way to check the status of your transaction is to sign into Client Bridge. After signing in, you can access your transaction summary page where you can view the progress of all your active Vector Escrow Services transactions and much more.
No, we are not licensed to handle real property transactions. This includes transactions involving deeds or timeshare ownership sales. We are licensed as an internet escrow agent for personal property transactions only.
Yes. If the parties agree to switch escrow companies, all must agree upon a new company and notify the original escrow officer in writing. The escrow agent will need written instructions to transfer documents and funds to the new escrow company.
No escrow is opened with the intention that it will cancel, but there are occasions when a contingency cannot be met or when the parties disagree during the pendency of the escrow. Some escrow holders provide for such an event by incorporating an instruction in the typed or printed general provisions.
Ordinarily, an Escrow Holder will take the position that no funds on deposit can be refunded until the Escrow holder is in receipt of mutual cancellation instructions signed by the Principals. The Escrow holder cannot normally make a determination as to who is the “rightful” party in a dispute on a cancellation and therefore will not return the funds or documents until the Principals agree.
Do expect to be charged a cancellation fee, as this is a charge for professional services rendered and quite often for several “out of pocket” expenses that have been incurred on the client’s behalf. These fees can vary from company to company depending upon their policies.
Sometimes, when a dispute exists, the Escrow Holder may be forced to allow a court to decide which party is entitled to which documents or funds; this is called an Interpleader Action. Fortunately, most disputes are resolved before the Interpleader is filed, as the costs for such legal actions are extreme. Those costs, incidentally, are normally paid out of the funds on deposit in the Escrow.
The key to any transaction as important as yours is to read and understand your escrow instructions. If you do not understand them, you should ask your escrow officer to explain the instructions.
Your escrow officer is not an attorney and cannot practice law; you should consult your lawyer for legal advice. Do not expect your escrow officer to advise you as to whether or not you have a “good deal” or are doing things the right way. The escrow officer is there to follow the instructions given by the principals in the escrow.
In order to expedite the closing of the escrow, you should check with your escrow officer as to what specific items you could do to assist. Ask the question “What can I do to expedite the closing of this escrow?”
Respond quickly to correspondence. Return phone calls. This will assist in the timely closing of the transaction.
If you are required to deliver funds into the escrow, make sure that you provide “good” funds in the form required by the escrow officer. In virtually every case this will be a wire transfer directly to our trust account at City National Bank. We do not accept checks, cash, or cryptocurrency.