Buyer Protection:

An escrow protects all parties of the buying / selling transaction as the buyer deposits the money in an escrow account which the escrow agent holds on to until the title or documents of ownership are transferred to the buyer’s name. It also helps the buyer secure a property at the soonest possible time as it gives the seller an assurance that you are serious about the purchase and seals the deal in your favor as a Deed of Sale is executed in your favor upon depositing the money. The escrow agent only releases the money to the seller once all the conditions of the escrow have been made.

Seller Protection:

An escrow protects the seller as he is guaranteed by the escrow agent that the buyer has deposited the amount of the sale into an escrow account that was opened in his favor. The seller has no need to worry about executing a Deed of Sale or to transfer the ownership documents as the buyer has already deposited the entire amount into an escrow account which he can collect after the transfer of ownership. The seller also does not have to shell out any money for taxes and expenses as they are deducted directly from the escrow account.

Release of Payment and Documents:

Once the transferred title and / or other documents of ownership are submitted to the escrow agent and reviewed and have been noted to follow all the conditions of the escrow agreement, then the escrow agent releases the money to the Seller and the documents of ownership to the Buyer.

Fees:

The buyer is usually the one who pays the escrow fee which costs anywhere from a fixed amount of P30K or a percentage of 1% or a combination of both. Your Licensed Realtor may know of a reputable and reasonably priced escrow agent who handles his buying and selling transactions already.