The process of buying a home involves many different people. Escrow officers help facilitate an important part of that process, including ensuring the safekeeping and legality of the escrow proceedings. To become an escrow officer, you must obtain an escrow license.
In the real estate industry, a home is in escrow when a buyer sets aside the amount of the home's purchase price into a third party deposit account, to be released to the seller upon the completion of certain conditions. The deposit made by the buyer is held by an escrow agency, and managed by a licensed escrow officer, who assists the home buyers with the closing process.
Escrow officers typically work for title companies, mortgage lenders or credit unions. During a home's closing process the escrow officer is responsible for processing any necessary paperwork, witnessing the document signings and explaining the companies' services to prospective home buyers. The primary function of the escrow officer, however, is to establish escrow accounts for home buyers and to maintain the funds and records of such accounts. Because of the nature of escrow proceedings, many officers have knowledge of both finance and real estate.
To obtain an escrow license, you pass the Escrow Officer Examination. Applicants must be actively affiliated with an escrow agency. Once an applicant has passed the Escrow Officer Examination, he usually has one year to apply for an Escrow Officer License with his respective state department. Application fees, as well as annual licensing renewal fees may be required based on individual state requirements. Continuing education requirements may also apply.
Because escrow officers work in conjunction with the real estate industry, the need for such agents varies according to the needs of the industry and overall economy. To find out more about becoming a licensed escrow agent in your state, you can contact you state's department of state for more information about training and licensing test dates.
- Washington State Department of Financial Institutions: Escrow Agent & Officer Licensing FAQs
- Education-Portal: Escrow Officer Education Requirements and Career Information
- Consumer Financial Protection Bureau. "§ 1024.17 Escrow Accounts." Accessed Sept. 13, 2020.
- North Carolina Real Estate Commission. "Questions and Answers on: Earnest Money Deposits." Accessed Sept. 13, 2020.
- South Carolina Association of CPAs. "SCDOR’s Online State Tax Lien Registry Launches on Nov. 1." Accessed Sept. 13, 2020.
Sophia Harrison began writing professionally in 2007. She has a Master of Arts in economics from the University at Buffalo-SUNY, as well as experience working in the New York City financial industry.