What is an Escrow Agent in Florida?

One of the most common terms in real estate jargon is “escrow”. While it may be a popular word, not everyone knows what it actually means—let alone its central importance in almost every real estate transaction.

In the simplest terms, escrow is when assets are held by a trusted third party until a predetermined event occurs. In real estate transactions, that event is the closing, when the buyer finally get title to the property while the seller finally receives their proceeds. 

Essentially, an escrow agent acts as an intermediary, guaranteeing that each party will receive their fair share as provided in the contract upon the fulfillment of the terms in the agreement.

This article will offer an overview of how an escrow agent works, why they are fundamental in Florida real estate, and how Marina Title can help.

The Functions and Principles of an Escrow Agent

Virtually every real estate transaction involves a set of financial factors besides the purchase price, including credit reports, a mortgage, insurance policies, home inspections, title/deed transfers, and many others. An escrow agent is entrusted to handle all these financial aspects to ensure everyone in a transaction will abide by the terms in the agreement and fulfill their respective obligations.

Thus, an escrow agent may not only handle vast sums of money, but title documents, personal property, legal instruments, or anything else of value—with the ultimate goal of mitigating the risk of fraud so all parties feel safe, willing, and able to fulfill their roles. 

In this sense, not only do buyers and sellers enjoy the benefits of escrow services, but also realtors, brokers, lenders, and anyone else with a stake in the transaction’s outcome.

Escrow Agent in Florida – How Does It Work? 

When someone wants to purchase or sell a property in Florida, the parties involved in the deal must agree to an offer before closing the transaction. After both parties reach an agreement to deal with each other, it is time to open an escrow account to safeguard all the assets and documents, especially the funds that will be used to purchase the property.

Up until closing, the escrow agent will safeguard the funds, assets, documents, and other valuable aspects of the transaction. Typically, escrow agents have experience handling all real estate-related documentation and guiding the parties throughout the process. 

Given their responsibilities, escrow agents receive an extreme amount of trust and are held to a higher standard than other parties in a transaction. All escrow agents have fiduciary duties to their clients, meaning they must abide by strict rules of ethics and professionalism. These duties include:

• Duty of care: An escrow agent must always act reasonably, protecting the assets entrusted to them as if they owned them.
• Duty of impartiality: When holding the assets in escrow, the agent must act neutrally and fairly between the parties in a transaction.
• Duty of loyalty: An escrow agent must act in the best interests of their client ahead of anyone else.
• Duty of full disclosure: All required information must be disclosed to the relevant parties in a time-efficient manner

Can an Attorney Serve as an Escrow Agent in Florida?

In Florida, a licensed attorney can act as an escrow agent. However, just because an attorney holds property pursuant to a transaction does not necessarily mean they are an escrow agent. 

The key distinction is that an escrow agent operates under a valid—and legally binding—escrow agreement. Entrusting property to a third party is a risky decision, so a formal agreement significantly increases the likelihood that the process is undertaken effectively and properly. 

Find a Reliable Florida Escrow Agent at Marina Title 

Marina Title is a premier Miami-based title company owned and operated by expert attorneys. Our knowledge and experience with virtually every aspect of Florida real estate means we can provide a streamlined set of title, escrow, and closing services. 

To learn how our trusted escrow agents can help, call Attorney Jennie Farshchian today at (305) 901-5628 or email [email protected] to schedule a consultation.