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inna ivchenko, Real Estate Pro in Calabasas, CA

Why Seller usually chooses Escrow service? (CA)

Asked by inna ivchenko, Calabasas, CA Mon Apr 9, 2012

Usually it is the Seller who chooses Escrow provider , often I'm asked why? It's just a custom to let the seller to choose Escrow and Title service in California. Do you have any other explanation to it?

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18
The reason is simple - seller has more at stake when it comes to transaction - seller wants to make sure everything is going as quickly as possible.
4 votes Thank Flag Link Wed Apr 11, 2012
Hi Inna;
This is one of those very touchy subjects. As an ABR, I know it's my duty to represent my buyer fully and with diligence. There is NO CUSTOM in California, or otherwise that I am aware of, that the seller chooses the service providers. It is part of the negotiation process, and the choice of escrow is no small matter. Old school agents will say, "It's always been that I pick the escrow and you can have the title," as if the agents are in some way party to the transaction. As a good agent, you must explain the import of the decision to your client (buyer or seller) and let them decide. The state of California was so concerned about escrow companies being forced on buyers during REO transactions that legislation was enacted to protect them from a lack of choice. How are REO's getting around it? By saying that the buyer can choose the company if they pay both sides. Some choice!
Please inform your clients about the importance of a licensed, insured NEUTRAL escrow to the overall success of the transaction. (I give a list of 5-10 good local companies, and let them shop and interview.) Then let them decide.
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) (310) 800-2954
http://www.thebremnergroup.com
Accredited Buyer Representative|Certified Distressed Property Expert |Pre-Foreclosure Specialist Certified
I want you to know that I appreciate any referrals from friends and associates who may be in the market to buy or sell real estate. You can count on me giving them the same high-quality service I provide to all of my clients.
3 votes Thank Flag Link Mon Apr 9, 2012
Actually, Inna, I'm not sure that this is true.

As a practical matter, the principals to the transaction rarely care. They leave it to the agents. But for those who care, the Seller generally cares about the Title company, because they are insuring the Warranty Deed. The choice of escrow company is more likely to interest the buyer, because they're the ones bringing the money.

All the best,
1 vote Thank Flag Link Mon Apr 9, 2012
Something VERY important that most agents don't understand is making sure an escrow company is DOC approved to protect their clients.
REO companies insist on picking escrow because they get a lowball deal on it. It's about quanity not quality. Most REO escrow transaction over look the customary services that your typical company will provide so don't assume they will do anything.
As for wanting escrow when I have the seller it's about having a relationship with an escrow officer that knows what they are doing and handles the transaction with care and attention to detail.
NOT ALL ESCROWS ARE THE SAME.......... Find an escrow officer that works hard & knows what they are doing at a DOC approved escrow company and fight for them in negotiations. It will make your life & your client's easier.
1 vote Thank Flag Link Mon Apr 9, 2012
The Buyer has most contact with escrow especially when financing the transaction but the Seller wants to be sure the transaction is kept on track so they usually prefer to select.
1 vote Thank Flag Link Mon Apr 9, 2012
Anything in a real estate transaction is negotiable.
As a Buyer's agent, I have found out many times that escrow companies and title companies are very competitive, legal, and regulated. Therefore, I don't force much negotiations for these items.
1 vote Thank Flag Link Mon Apr 9, 2012
Mostly tradition. Costs in theory are pretty evenly split on Escrow, but buyer probably pays a little more after fees are added so it would make sense for the buyer to have choice. Not to mention the buyer generally has more interaction with escrow. In the past it has usually been that the Buyer got Title selection and seller got escrow. But title is less of an issue these days. I suppose it might stem from REO deals where banks use to hold on to Escrow selection with an iron hand.

I have never come up with a strong reasoning for this but only fight it occasionally when there is a bona fied reason.
1 vote Thank Flag Link Mon Apr 9, 2012
Hi the Inna! =] hope you are well. I think this is because the seller is more likely to be the one that already has an existing relationship with an escrow office or officer. For this reson they usually care and also have the leverage as the seller to chose escrow, but also the buyer most of the time doesn't really care about escrow cause half the time they are a first time buyer and they have never even worked with an escrow company before.
1 vote Thank Flag Link Mon Apr 9, 2012
The escrow company is negotiable just like the title company and seller s usually are the ones who can dictate who they want to use. Some times when banks sell the properties it is tough to use your title or escrow company.

Best Wishes,

David R. Indermill

Re/Max Hall Of Fame, CDPE | Since 1998 | Luxury Real Estate Advisor
International Referrals | Bank Owned Assets | Off Market Properties
Large Cash Investor Fast Close Network | B.R.E License # 01232827


http://www.SanDiegoHomeStore.Com

Cell: 858-414-LIST (5478) Texting OK
Fax: 858-430-5544
Email: david@sandiegohomestore.com
0 votes Thank Flag Link Thu Mar 20, 2014
Escrow is a 3rd neutral party who gets instructions from the seller and work off the RPA. Typically, the Seller chooses services so they have control over the transaction and have a comfort level with closing.
0 votes Thank Flag Link Thu Mar 20, 2014
I've always understood it actually Buyer's choice...

RESPA

The Real Estate Services Procedures Act, a set of federal laws, currently dictates many practices within the real estate industry. Among the many RESPA laws, the act gives buyers the right to select which title insurance company to use in their real estate transaction. Often, consumers rely on their real estate or escrow agent to choose the insurer; however, it is the buyer’s right to decide which insurer to use. When purchasing a loan policy, you will also need to meet your lender’s requirement when selecting a title insurance underwriter. Your real estate or escrow agent will provide you with a disclosure detailing your rights.
0 votes Thank Flag Link Thu Mar 20, 2014
Hello Inna,

this is a great question, and I'm looking forward to reading a lot of experienced answers and opinions. I';ve recently just relocated to Los Angeles. I had been practising real estate sales for years in Cleveland, Ohio, my hometown.

In Ohio, it was customary to let the buyer choose the title agent. only for REO properties, the banks were adamant on using their own choice. they made this exception easier to swallow by paying much of the buyer's closing costs.

All the best,
Kieran Jackson, CA DRE # 01903647
Keller Williams Hollywood Hills
213.632.8484 Direct
KieranJackson@kw.com

Short Sale Specialist (SFR)
Web Reference: http://KieranTheRealtor.com
0 votes Thank Flag Link Tue Jun 5, 2012
Is the cost of escrow & title service in CA expensive ?
0 votes Thank Flag Link Mon Apr 23, 2012
The escrow company is negotiable, nowhere is it written that the seller gets to pick escrow or title.
0 votes Thank Flag Link Fri Apr 13, 2012
It is never written in stone that the seller must choose escrow or title company. Sellers are shopping for the best deal for them and buyers should do the same. You can always negotiate that option unless it is a bank owned or short sale property. In that case usually banks have escrows and title companies that handle their contracts. If you ever find yourself in a multiple offer situation it would be wise to let the seller choose since it will make your offer stronger.
0 votes Thank Flag Link Fri Apr 13, 2012
Inna:

First, a quick TU for my fellow ABR® Deborah!

I fully agree the Buyer should be proactive in seeking the most competent and professional Escrow and Title Company service providers possible (and as Laura mentions, DOC-approved) --especially when dealing with REO properties.

As demonstrated in the "real world story" contained in the blog post below, having the Buyer choose, and if necessary, paying for Escrow/Title services may be considered conservative but may also be warranted to exercise proper due diligence.

"REOs: How Buyers Can Avoid Hidden Unsecured Property Tax Liens"
http://www.trulia.com/blog/steve_ornellas_mba_re_mastersgri/…

While each County in CA has their customary escrow and title fee splits [ http://docs.Steven-Anthony.com/ClosingCostsGuide.pdf ] this in no way obligates any Buyer/Seller – every dollar to be spent is negotiable based on the situation at hand.

-Steve
0 votes Thank Flag Link Tue Apr 10, 2012
Everything is negotiable, however, often the Seller is selecting them because when they listed the property, the seller started checking for estimated settlement costs and what they would net based on certain sales prices. From that point on, the seller has generally started a relationship and they like to keep it as the costs and figures could change going with someone else. If you have a strong buyer though, it is not difficult to get your choice... if a buyer or seller chooses to lose a deal over service providers, then one or the other was not that serious to begin with. Just ask and see what happens.
Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills South
166 N. Canon Dr, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0690 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Mon Apr 9, 2012
Unless the seller has had prior experience with a particular escrow company than the decision is influenced by the agent representing the seller. An agent who has an ongoing relationship with a top notch escrow company will get better service than working with an unknown company. Loyalty and good relationships trickle down to the buyer and sellers in a transaction.
0 votes Thank Flag Link Mon Apr 9, 2012
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