- Real estate brokers licensed by the DRE can perform escrows (known as Broker Controlled Escrows) under an exemption from the State’s Escrow Law only where the escrows are in the course of or incidental to a real estate transaction in which the broker is an agent or a party to the transaction and in which the broker is performing an act for which a real estate license is required.
- Real estate escrows performed by independent escrow companies licensed by the California Department of Corporations do not have the limitations imposed on Broker Controlled Escrows, and provide broad indemnification protections. Such escrow companies, when performing relevant real estate escrows, must be members of the Escrow Agents’ Fidelity Corporation, which provides coverage to its members of between $1,000,000 and $5,000,000 for certain fraudulent and dishonest conduct by certain individuals involved in the member companies.
- Payments, costs and fees must be fully disclosed and made part of the escrow documents. If there are any payments, costs and fees to be paid “outside” of escrow, this may be the red flag that the payment is unlawful.
- You can choose the escrow holder, and the fees charged by the escrow are or may be negotiable.
- When possible, meet the people who will be working on your escrow in person, always retain a copy of everything you sign and receive, and be sure to question unexpected or last minute changes to documents.
You should do your own homework with regard to the escrow holder that is selected. Check them out through State licensing websites, Better Business Bureaus, “Google”-type searches, and by talking with real estate licensees and others who have bought, sold, or refinanced homes. Ask the escrow holders specific, detailed questions.
For a copy of the pamphlet, visit http://bit.ly/OnlineEd112. For more information about DRE and its programs visit www.dre.ca.gov.
Jeff Sorg is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses in Oregon, Washington, California, and Nevada and has authored numerous pre-licensing and continuing education courses. Sorg was awarded the International Distance Education Certification Center’s CDEi Designation for distance education in 2008.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.