"Escrow Agreement Template"

What Is an Escrow Agreement?

An Escrow Agreement is a document that outlines the intention of two parties to deposit assets with a third party. Once the terms and conditions of the contract between two counterparts are met, the third party, called an escrow agent, delivers indicated assets to one of them. For example, an individual wishes to purchase an apartment. To do so, they put a deposit with the escrow agent to make sure that before the agreement between them and the current apartment owner is signed, this real property does not change hands until obligations listed in the Escrow Agreement Form are followed through.

Alternate Name:

  • Escrow Contract.

Since the deposit is given to a trusted and neutral third party, the purchaser does not have to worry - even if the deal falls apart, an Escrow Agreement to hold funds still commands the agent to give the money back to the buyer. The seller, in turn, can be sure that the buyer is actually interested in the property in question and will make sure the deal is done quickly.

An Escrow Agreement template can be downloaded below or you can compose your own document using our online form builder.

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What Is the Purpose of an Escrow Agreement?

Draft an Escrow Agreement to reduce the risk of fraudulent actions by entrusting the money to a reliable escrow agent. It is indispensable in business deals that require assurances that one party will fulfill its contractual obligations and only then the other party will pay money for the goods. This document is commonly used in the securities sector to deliver stock and in real estate deals to allow the purchaser to perform due diligence and assure the seller that the buyer will be able to pay for the house or apartment.

There is no other contract that will offer this kind of assurance to concerned parties - it provides the seller and buyer with security - no counterpart wants to lose their property or money, so a trusted agent is necessary to make the transaction as smooth as possible. The parties choose the bank to open an escrow account and the buyer puts their money in this account. When the parties notify the agent that the transaction obligations are completed, the agent gives the money to the seller.

How to Make an Escrow Agreement?

Follow these steps to create a proper Escrow Agreement:

  1. Identify the parties to the contract - the seller, the buyer, and the agent. The three-party agreement is the acceptable Escrow Agreement format. Add full names of the parties, their mailing addresses, and telephone numbers.
  2. Indicate the intention of the parties to enter into the escrow agreement for the sale and purchase of certain assets. Describe those assets - if it is a real estate, add its precise location.
  3. Confirm that the seller and purchaser have appointed the agent to hold a certain sum of money until the purchased property is adequately delivered - the seller must deliver the goods, and the buyer pays for them.
  4. Outline the responsibilities of the agent. This individual or company agrees to hold the funds and release them when two other parties give them the authorization to do so.
  5. Decide who will bear the costs of the transaction. Usually, the agent bears no costs, and the seller and purchaser divide the expenses between themselves.
  6. State where the escrow funds are located. It is recommended to deposit them into a bank account. The agent is not allowed to join their personal funds with the escrow funds.
  7. Write down the fee the agent is entitled to receive. You may give the agent the right to deduct fees from the escrow amount before this money is disbursed.
  8. Describe the notification process. Once the agent receives a letter from two other parties that contains instructions for the disbursement, it is their duty to release the funds.
  9. Certify you have read and understood the contract, sign, and date it.

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Escrow Agreement
This Escrow Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ________________ by and between _____________________, with a mailing address
of _____________________________________________________________________
(hereinafter referred to as the “Seller”) and _____________________, with a mailing
address of _______________________________________________________________
(hereinafter referred to as the “Purchaser”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
1. Property Address. The Seller and Purchaser have expressed an interest to enter into
this Escrow Agreement for the sale and purchase of the property located at the following
address:
________________________________________________________________________
2. Escrow Agent. ​ T he Parties have appointed _____________________ (hereinafter
referred to as the “Escrow Agent”) to hold $________________ in accordance with the
terms and conditions of this Agreement, listed below.
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;
The Escrow Agent will hold any notifications and instructions they may receive as valid
without the requirement to investigate or question the sender;
The Escrow Agent will not be permitted to combine personal accounts with the escrow
funds at any time during the period of this Agreement.
3. Terms and Conditions.
● The Seller and Purchaser have agreed to appoint the Escrow Agent to hold the
amount mentioned above 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 Agreement in its entirety;
©​ ​ ​ ​
T EMPLATEROLLER.COM​
Escrow Agreement
This Escrow Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ________________ by and between _____________________, with a mailing address
of _____________________________________________________________________
(hereinafter referred to as the “Seller”) and _____________________, with a mailing
address of _______________________________________________________________
(hereinafter referred to as the “Purchaser”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
1. Property Address. The Seller and Purchaser have expressed an interest to enter into
this Escrow Agreement for the sale and purchase of the property located at the following
address:
________________________________________________________________________
2. Escrow Agent. ​ T he Parties have appointed _____________________ (hereinafter
referred to as the “Escrow Agent”) to hold $________________ in accordance with the
terms and conditions of this Agreement, listed below.
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;
The Escrow Agent will hold any notifications and instructions they may receive as valid
without the requirement to investigate or question the sender;
The Escrow Agent will not be permitted to combine personal accounts with the escrow
funds at any time during the period of this Agreement.
3. Terms and Conditions.
● The Seller and Purchaser have agreed to appoint the Escrow Agent to hold the
amount mentioned above 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 Agreement in its entirety;
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● 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;
● Additionally, unless written permission has been received from the Parties by the
Escrow Agent then no releases or disbursements shall be made;
● 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 Seller, Purchaser, and Escrow Agent;
● Furthermore, all parties agree that there will not be any beneficial results for any
third parties nor will third parties be involved in any decisions for this Agreement.
4. Notification. ​ W ith written notice from both the Seller and the Purchaser, the Escrow
Agent will disburse the funds based on the instructions provided within such notice.
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 ____________________
before the disbursements scheduled delivery.
5. Governing Law. The Parties agree that this Agreement shall be governed by the laws
of _____________________.
State
6. Liabilities. ​ U nder the following circumstances the Escrow Agent shall not be held
liable or found at fault:
● Any loss of funds directly related to the suspension, insolvency, or failure of the
funds or the bank themselves;
● For any omission or error by a party other than the Escrow Agent themselves;
● Any legal proceedings between the Purchaser and Seller;
● Any and all interest accrued during the term of this Agreement shall be the
property of the Purchaser and shall be disbursed as so.
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7. Agreement. The Parties agree to the terms and conditions set forth above as
demonstrated by their signatures as follows:
SELLER
PURCHASER
ESCROW AGENT
____________________
____________________
____________________
Name
Name
Name
____________________
____________________
____________________
Signed
Signed
Signed
____________________
____________________
____________________
Date
Date
Date
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