Buying a real estate property can be a challenging administrative process that entails the transfer of big amounts of funds.
Most first-time buyers find the legal aspects related to the transfer of funds hard to understand. This is why they are advised to hire a qualified Title Company staffed by experienced lawyers. An experienced real estate attorney will lead them through the complexities of the process and help them avoid complications.
Often two terms come up during a real estate transaction: escrow and trust account. Most people are unaware what these concepts mean, and what the difference between an escrow and a trust account is. Always hire an experienced title company to handle your real estate needs.
Escrow is an administrative arrangement in which a third party holds funds (and documents) on behalf of a property buyer or a seller. An escrow functions as a bank account. Its conditions are defined by all parties involved in the transaction and the responsibilities of the involved parties are strictly defined.
A trust account is a little different from escrow. A trust account is managed by an official of the Judicial System. A trust’s funds can be opened and managed by a lawyer only.