Throughout the complex home buying process, the possibility of hearing the term "escrow" numerous times is high. For first time buyers, this can be a little bit confusing. As a buyer of Rancho Santa Fe homes for sale, it is a privilege of yours to be aware and understand escrows, including the laws that preside over it.

Definition of Escrow

The term escrow is defined as any asset that has a value to a certain party held by an unbiased third party to be utilized or delivered to another party after the fulfillment of a particular obligation, condition, or event. Examples of assets include deeds, a document, or money. The term "escrow" can also be used to refer the transaction itself.

Escrow Law

The Escrow Law was enacted for the purpose of protecting the parties who delegate their assets to escrow agents here in Rancho Santa Fe or anywhere in California. Escrow agents, Internet escrow agents, and joint control agents are subject to the provisions of the law.

An escrow agent is an individual who works in the area of receiving escrows for the intent of delivery or deposit; an Internet escrow agent is an individual who also does the same business, but performs it over the Internet.

A joint control agent, on the other hand, is an individual who receives money or other possessions for spending or payment of the expense of materials, services, fees, permits, labor, or other things obtained in the building of real property improvements.

Anyone who is involved in the escrow or joint control business must become a corporation that is arranged for that function and must be licensed by the Commissioner, as stated under the Escrow Law. In addition, every Internet escrow agent is subject to the licensure requirements; however, certain individuals are exempted from these, including the following:

1. Any individual who performs business under any state or federal law that is related to savings and loan or building and loan associations, insurance companies, banks, or trust companies.

2. An individual who has a license to practice law here in California and has a valid business relationship with a principal in a personal property deal or real estate; moreover, someone who is not engaged in the business of an escrow agent.

3. Any individual whose chief business is making searches or preparing abstracts of title utilized as a basis for the allocation of a title insurance policy by a particular company that is subject to any state law concerned with insurance companies.

4. A real estate broker that has a license from the Real Estate Commissioner while performing in a deal in which he / she is an agent and is obliged to have a real estate license.

The following are the requirements to be able to acquire a license under the Escrow Law:

1. Pay the application fee

2. Has to be a member of the EAFC or the Escrow Agents' Fidelity Corporation

3. File a fidelity bond

4. Pass audited financial records that demonstrate the minimum financial requirements

5. File a surety bond of no less than $25,000

6. Has to submit oneself to background checks done by the Department

7. Has to reach the minimum required experience

8. Must give a signed affidavit as proof that he / she understands the Escrow Law

9. Has to file a branch office application

If you are buying a house in Rancho Santa Fe real estate, it is crucial to be familiar with the legal aspects of the process of home buying, including the Escrow Law.