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What is escrow?

When you buy a home, escrow is an account you set up with your mortgage lender, attorney, escrow company, or title company. This is the account where your earnest money resides pending the closure of your loan. After you close your loan, it’s also an account you may use to have your lender pay your property taxes and homeowner’s insurance on your behalf.

Where to find escrow services

In Washington state, there are several parties who perform escrow services. Here’s a listing of those parties and the agencies that regulate them:
ATTORNEYS - Washington State Bar Association
BANKS & LENDERS - Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS)
INDEPENDENT ESCROW COMPANIES - Washington State Department of Financial Institutions
TITLE COMPANIES - Washington State Office of Insurance Commissioner

Escrow Services from Tri-City Title & Escrow
What to Expect from an Escrow Agent
What to expect from


The duties of the escrow agent include:

  • Serving as a neutral third party
  • Receiving authorization from the buyer and seller to set up an escrow. They may do this via a purchase and sale agreement transaction (also called an earnest money agreement), or via a loan application from a mortgage broker/lender for a refinance transaction
  • Writing the escrow instructions on behalf of the seller and buyer after reviewing the earnest money agreement or lender’s instructions. Most escrow agents prepare their own written escrow instructions to conform with the earnest money agreement and the lender’s instructions
  • Following instructions precisely and in a timely manner from the buyer, seller, real estate agents, loan officer, mortgage broker, and funding lender
  • Serving as a trustworthy person who is obligated to safeguard the funds or documents in his or her possession.
  • Paying all bills as authorized
  • Providing an accounting for the escrow transaction using a closing or settlement statement known as a HUD 1 statement
  • Assuring funds or property will not change hands until ALL of the conditions necessary to the transaction are complete
  • Dispersing funds or transferring the title according to the instructions after all the conditions necessary to the transaction are complete
What an Escrow Agent


Most escrow officers are not attorneys and cannot practice law. For legal advice, you should consult a lawyer. An escrow officer cannot negotiate transactions or offer investment advice. Do not expect the escrow officer to give you advice about whether or not you are getting a “good deal” or you are doing things the right way. The escrow officer is there simply to follow the instructions given by the parties to the transaction.

The Cost of


You should know that escrow fees are not regulated by the state. Some escrow agents will offer a low escrow fee, but charge you other incidental fees related to the transaction, which increases the total escrow fee. Other incidental costs may include:

  • Wire transfer fees
  • Tracking or reconveyance fees (a reconveyance fee is what title insurers charge you to cover the cost of removing your current lender’s lien from your property title when you refinance)
  • Trustee fees
  • Electronic document fees
  • Courier fees
  • Fax fees
  • Copying fees
  • Trust accounting fees

The escrow agent should provide you the total fee amount he or she will charge you so you can compare prices or fees effectively.

Your role during the


As a buyer, it’s important that you read and understand the escrow instructions. The escrow instructions define what the escrow agent is going to do to meet the parties’ conditions. If you have any concerns or questions about the process, be sure to ask the escrow officer.

How you can help expedite the


If you are concerned about how long the escrow process is taking, ask the escrow officer what you can do to help speed up the closing of the escrow. Also, make sure you respond quickly to any correspondence related to the transaction.

Watch out if an Escrow Agent offers you


If an escrow transaction involves someone offering you rebates or incentives in return for choosing their services, and a title insurance company is not handling the escrow function, report it to the Washington State Department of Financial Institutions at 360-902-8700 or 1-877-RING-DFI (1-877-746-4334).

For more information:
Office of the Insurance Commissioner

Department of Financial Institutions
or 1-877-RING-DFI (1-877-746-4334)

What is a closing or settlement statement also known as HUD-1?

The HUD-1 is a form used by the escrow agent to itemize all charges you and the seller must pay for the real estate transaction. It gives each of you a complete list of your incoming and outgoing funds. The HUD-1 form:

  • Is a written accounting of the escrow transaction
  • Is prepared at the close of escrow
  • Includes all charges and credits to your escrow account
  • Reflects the:
    • Purchase price
    • Funds deposited or credited to your account
    • Payoffs on existing encumbrances or liens
    • Charges for all services
    • Net proceeds (a final determination of the amount you are entitled to receive at the close of the escrow)
    • Required funds you must bring in to close the transaction



Be sure to review the closing or settlement statement carefully. It is the final statement of the finances of your transaction. If you do not understand something on it, be sure to ask the escrow agent to explain it.

For more information about settlement service costs, contact your lender or mortgage broker to get a copy of the booklet Buying Your Home, Settlement Cost and Helpful Information provided by the US Department of Housing and Urban Development Office of Housing-Federal Housing Commission. You can also access a copy online at

Get in Contact

If you are a real estate agent, lender or builder and would like more information on the services we offer, please click on one of the buttons below to contact us.

Tri-City Title & Escrow | 8131 W Grandridge Blvd #100 | Kennewick, WA 99336