Is a Broker an Escrow Agent?
Entering the world of real estate, especially for the first time, comes with a whole new vocabulary. Whether you’re buying or selling, learning what’s what and who’s who can take some time (and patience). For example, who is a broker? An escrow agent? Is a broker an escrow agent?
Real estate agents must complete an official real estate training course and pass a certification exam to obtain their license. Once licensed, real estate agents can provide guidance and negotiations to buyers or sellers during a real estate transaction, as well as complete paperwork and other documentation. However, real estate agents must do these duties under the guidance and oversight of a real estate broker. So, what sets a real estate broker apart from a real estate agent?
A broker is a licensed real estate agent who continued their education and training to earn their real estate broker license. Whether they work at a brokerage (with real estate agents working under them) or work independently, a real estate broker can create, negotiate, and close contracts as a buyer’s or seller’s agent without direction from another real estate professional. Brokers are responsible for ensuring that their contracts (and those of the agents under them) are legally compliant. Becoming a broker is no easy task; candidates must have at least 2 years of real estate experience, at which point they must enroll in 72 hours of classroom training before successfully passing a licensing exam. It doesn’t end there though; after receiving an initial license, brokers must complete another 60 hours of classroom training to earn their permanent license.
In contrast, an escrow agent is a neutral third-party involved in a real estate transaction; they do not represent the buyer or the seller, or either agent or broker. An escrow agent is usually an employee of a title company. They collect and hold any earnest money until all terms of the real estate contract have been met. Once the escrow agent has verified that all conditions are satisfied, they release that money to the appropriate party. Additionally, an escrow agent may conduct a title search, issue title insurance, or act as a closing agent.
So, is a broker an escrow agent? The answer is no! A broker acts as a representative for a buyer or seller, while an escrow agent is a neutral party. While a broker may facilitate a contract, the escrow agent is responsible for ensuring all the terms are met to close. While they each hold different roles in a real estate transaction, both brokers and escrow agents are critical to ensuring that the process is completed in a smooth and timely manner.
Ready to work with an escrow agent at Clear Title? Call one of our offices to schedule an appointment:
Pensacola: (850) 361-4029
Pace: (850) 994-3838
Pine Forest: (850) 202-8518