Before choosing an escrow company, both parties to the transaction need to ask one crucial question that can make the difference between a lengthy escrow period peppered with delays, or a smooth process easing the way toward your next front door: Do I hire a licensed independent company specializing only in escrow, or one of the so-called controlled companies possibly owned by more than one entity and providing more than one service, such as realty, mortgage, loans, or title?

There is a significant difference between both types of escrow providers.

During the purchase or sale of such a valuable asset as your home, protection is a main factor in choosing who will handle a majority of the administrative and financial steps. Independent escrow companies, such as Premier Escrow Services, are licensed and regulated by the California Department of Corporations, an arm of the state government designed to protect consumers from unfair business practices. Controlled companies, or “in-house” escrow companies, are overseen by a loosely related variety of groups often with varying rules and disciplines regarding escrow, or by the Department of Real Estate whose focus is realty transactions, not escrow. Only the California Department of Corporations has strict regulations and only independent escrow companies are licensed by the state.

An independent escrow company can further protect your funds and assets because it is bonded by the Escrow Agents Fidelity Corporation with insurance very much like the insurance provided by the federal government that protects your valuables when deposited in a trusted bank. With an independent escrow company, your assets are protected.

All agents working for independent escrow companies are approved by the California Department of Corporations and subject to background checks by the Department of Justice, and all independent offices are staffed full time by at least one agent with a minimum of five years experience. In addition, all independent escrow companies are subject to yearly or bi-yearly examinations by the state Department of Corporations, and a financial and internal controls audit by a Certified Public Accounting firm licensed in California. Controlled companies are not subject to such regulations or held to such high standards.

Independence and a proper segregation of duties, without any conflicts of interest, is crucial in a transaction involving your home. Servicing by an independent escrow company helps ensure a better escrow process. Would you let a fox guard your henhouse? Contact us today to discuss the importance of having an independent escrow.