What is an escrow agreement template? An escrow agreement is a contract that outlines the conditions and terms of a transaction for an asset that is held by a third party, the escrow agent, until all conditions have been met. Such conditions are established by the parties before an escrow agent is appointed. While escrow agreements are often associated with real estate transactions, they can be used in any situation where funds are moving from one party to another.
This escrow agreement (“Agreement”) is made and entered into on [Agreement.CreatedDate] between [Sender.FirstName] [Sender.LastName] (Seller) and [Client.FirstName] [Client.LastName] (Purchaser), collectively known as the Parties.
This Agreement shall be effective on [effective date] . [List out any other requirements for the Agreement to become effective, if there are any.]
The Seller and Purchaser have expressed an interest to enter into this Agreement for the sale and purchase of the property located at [Property.Address] .
The Parties have appointed [Escrow.AgentName] (Escrow Agent) to hold $ [Escrow.Amount] in accordance with the terms and conditions of the escrow Agreement, listed below.
An escrow agent is a neutral third party who is responsible for holding the money and documents in a real estate transaction until all the conditions of the sale have been met. This position can be held by a person or entity. The template states that the escrow agent will hold the funds listed above until delivery of the purchased property is made. This ensures that the seller delivers the product and the purchaser pays for it.
The Seller and Purchaser have agreed to appoint the Escrow Agent to hold the above amount for the term of this agreement.
Furthermore, the Escrow Agent is willing and able to accept such responsibilities as well as act in compliance with this escrow agreement in its entirety.
In the instance any disagreement shall arise, the Parties agree the Escrow Agent shall not be held liable for any costs, damages, or losses that may arise from duties performed.
Furthermore, unless written permission has been received from the Parties by the Escrow Agent then no releases or disbursements shall be made.
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This section of the template limits the escrow agent’s responsibilities. They are simply charged with holding the agreed funds and releasing them when the purchaser and seller authorize them to do so.
If such disagreement between the Seller and Purchaser does occur, the Escrow Agent will have the right to be discharged from this agreement by turning all agreements and documentation over to the jurisdiction responsible for this agreement.
Any and all costs to the Escrow Agent from such proceedings shall be the responsibility of the Seller and Purchaser.
This agreement is for the benefit of the Escrow Agent, Seller and Purchaser. Furthermore, all parties agree there are no beneficial results for any third parties nor will third parties be involved in any decisions for this escrow agreement.
All funds received with regard to this escrow agreement hereto shall be deposited into a federally insured bank money market account.
Any fees due to the Escrow Agent, including shipping fees, at the time of disbursement request may be deducted from the escrow disbursement amount prior to disbursement.
This section of the template authorizes the escrow agent to deduct any fees they are owed from the escrow account.
The Escrow Agent will not be permitted to combine personal accounts with the escrow funds at any time during the period of this escrow agreement.
The Escrow Agent will hold any notifications and instructions they may receive as valid without the requirement to investigate or question the sender.
All instructions to the Escrow Agent will be in writing.
The written notice inclusive of directions for disbursement may be delivered in person or via facsimile.
Notification must be provided to the Escrow Agent no less than [number] hours before the disbursements scheduled delivery.
With written notice from both the Seller and the Purchaser, the Escrow Agent will disburse the funds based on the written instructions provided within such notice.
If these instructions have been signed by both Parties, the Escrow Agent will carry out the instructions immediately. If the instructions have only been signed by one of the Parties, then the Escrow Agent will immediately send a copy of the instructions to the other party.
If the other party does not deliver to the Escrow Agent written objections to the proposed action in these instructions within [number] days of receipt of these instructions, the Escrow Agent will act in accordance with the instructions.
If the Escrow Agent receives an objection to its acting in accordance with the instructions within the [number] day period, it will not proceed until it receives instructions signed by both parties or until a court of competent jurisdiction directs it to do so.
Under the following circumstances, the Escrow Agent shall not incur any held liable or be found at fault,
The Seller and Purchaser will indemnify and hold harmless the Escrow Agent for all of its costs, expenses and reasonable attorney’s fees incurred in connection with [type of action] in excess of [amount in dollars] .
This escrow agreement will be governed by the applicable laws of the state of [State] in [Country] .
The purpose of this section is to give the parties an opportunity to dispute any of the alleged events of default. Feel free to add, edit, and delete parts as needed.
In the event of a dispute, a dispute resolution may be requested within [number] business days of receiving a notification.
The Parties agree to have their dispute resolved through an independent arbitrator. Once a dispute resolution is requested, the parties will submit their claims including supporting documents in writing to the arbitrator within [number] business days after the delivery of the request for dispute resolution.
All arbitral awards will be in writing and will set forth the findings of fact and conclusions of the law of the arbitrator. The arbitrator’s decision will be binding and final upon the Parties and enforceable in any court of competent jurisdiction.
All three parties should sign this escrow agreement template. This ensures that they fully understand their roles and responsibilities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their respective names, all as of the date written below.
By signing below all parties agree to have read and understand the terms and conditions outlined in this escrow agreement hereunder.