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Real Estate Escrow Agreement template
Real Estate Escrow Agreement sample


What is Real Estate Escrow Agreement?

Real Estate Escrow Agreement An agreement establishing an escrow arrangement for real estate transactions, specifying escrow terms, release conditions, and responsibilities.



Sample template:



REAL ESTATE ESCROW AGREEMENT


This Real Estate Escrow Agreement (the "Agreement") is entered into as of [Date] by and between [Seller's Name] ("Seller"), [Buyer's Name] ("Buyer"), and [Escrow Agent's Name] ("Escrow Agent") collectively referred to as the "Parties."

1. PURPOSE AND DEFINITIONS

1.1. Purpose


This Agreement establishes the terms and conditions that govern the escrow of funds and documents in connection with the sale of commercial property located at 123 Main Street (the "Property") in accordance with, and subject to, the Purchase and Sale Agreement between the Parties dated [Date] (the "Purchase Agreement").



1.2. Definitions


Terms used in this Agreement shall have the same meaning as in the Purchase Agreement, unless otherwise specified herein.



2. ESCROW DEPOSIT

2.1. Deposit of Funds


Buyer shall deposit with Escrow Agent the sum of [Enter Amount] (the "Escrow Deposit") within [Number of Days] business days from the execution of the Purchase Agreement. The Escrow Deposit shall be held in a separate interest-bearing escrow account maintained by Escrow Agent for the benefit of the Parties hereto in a federally insured financial institution.



2.2. Deposit of Documents


Within [Number of Days] business days from the execution of the Purchase Agreement, Seller shall deposit with Escrow Agent the following documents relating to the Property (the "Documents"): [List of Documents].



3. ESCROW AGENT RESPONSIBILITIES

3.1. Holding and Disbursing Funds and Documents


Escrow Agent agrees to hold the Escrow Deposit and the Documents in accordance with this Agreement. Escrow Agent shall only release or transfer the Escrow Deposit and the Documents upon the conditions and in the manner set forth in this Agreement or upon receipt of written instructions signed by both Seller and Buyer.



3.2. Interest


Any interest that accrues on the Escrow Deposit shall be distributed to the Party entitled to receive the Escrow Deposit as determined by the terms of this Agreement.



3.3. Communication and Notices


Escrow Agent shall promptly notify the Parties of any atttempt by a third party to levy or garnish the Escrow Deposit, and shall not disburse any portion of the Escrow Deposit in response to such attempted levy or garnishment unless compelled to do so by a court of competent jurisdiction. All notices and communications between Escrow Agent and any Party shall be in writing and sent to the addresses provided in this Agreement or the Purchase Agreement.



4. RELEASE CONDITIONS

4.1. Release Upon Closing


Upon the closing of the Purchase Agreement and satisfaction of the conditions precedent to closing therein, Escrow Agent shall release the Escrow Deposit and the Documents to the respective parties as follows: (a) the Escrow Deposit, less any fees and expenses to which Escrow Agent is entitled pursuant to this Agreement, shall be disbursed to the Seller; and (b) the Documents shall be delivered to the Buyer.



4.2. Release Upon Termination


If the Purchase Agreement terminates according to its terms without closing, Escrow Agent shall release the Escrow Deposit and the Documents to the respective parties as follows: (a) the Escrow Deposit shall be disbursed to the Buyer or Seller, as provided in the Purchase Agreement; and (b) the Documents shall be returned to the Seller.



5. FEES AND EXPENSES

Escrow Agent shall be entitled to reasonable fees and expenses for its services hereunder, and such fees and expenses shall be paid in accordance with the Purchase Agreement or as otherwise agreed by the Parties. If the Purchase Agreement does not specify how the fees and expenses shall be apportioned, they shall be paid one-half by Seller and one-half by Buyer.



6. INDEMNIFICATION AND LIABILITY

Each of the Parties agrees to indemnify and hold harmless the Escrow Agent from and against any and all losses, claims, damages, liabilities, fees, expenses or costs (including reasonable attorneys' fees) incurred by or asserted against the Escrow Agent in connection with its performance of its duties under this Agreement, unless such losses, claims, damages or liabilities arise from the gross negligence or willful misconduct of the Escrow Agent.



7. DISPUTE RESOLUTION

7.1. Disputes Between Parties


In the event of any dispute between the Parties regarding the Escrow Deposit or the Documents, or the rights of the Parties under this Agreement, Escrow Agent may, in its sole discretion, continue to hold the Escrow Deposit and/or Documents until the receipt of written instructions signed by both Seller and Buyer, or until ordered to do so by a court of competent jurisdiction.



7.2. Interpleader


In the event of any dispute between the Parties in which Escrow Agent cannot determine, in its sole discretion, the proper course of action, Escrow Agent may, upon notice to the Parties, deposit the Escrow Deposit and/or Documents with a court of competent jurisdiction and commence an interpleader action to resolve the dispute. All costs and expenses, including reasonable attorneys' fees, incurred by Escrow Agent in connection with such interpleader action shall be paid from the Escrow Deposit or by the Parties in such manner as the court may direct.



8. GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of the United States and the State in which the Property is located, without regard to principles of conflicts of law. Each Party irrevocably consents to the exclusive jurisdiction of the courts of the State in which the Property is located and the federal courts located therein, for the resolution of any dispute arising out of or relating to this Agreement.



9. MISCELLANEOUS

9.1. Binding Effect


This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.



9.2. Amendment


This Agreement may be amended, modified or superseded only by a written instrument signed by each Party and Escrow Agent.



9.3. Entire Agreement


This Agreement, including any Exhibits and all integrated references, contains the entire understanding of the Parties with respect to its subject matter and supersedes all prior or contemporaneous agreements, negotiations, representations or understandings of any kind, whether written or oral.



IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above.

____________________________ ____________________________
[Seller's Name] [Buyer's Name]
Seller Buyer

____________________________
[Escrow Agent's Name]
Escrow Agent

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Main Sections of a Real Estate Escrow Agreement


In this Real Estate Escrow Agreement, you will see the following sections:

  1. Purpose and Definitions
  2. Escrow Deposit
  3. Escrow Agent Responsibilities
  4. Release Conditions
  5. Fees and Expenses
  6. Indemnification and Liability
  7. Dispute Resolution
  8. Governing Law and Jurisdiction
  9. Miscellaneous


About each Section - Analysis and Summary:

  1. Purpose and Definitions : This section explains the purpose of the agreement, which is to set the terms and conditions for holding funds and documents related to the sale of a property. It also clarifies that terms used in this agreement have the same meaning as in the Purchase Agreement, unless specified otherwise.

  2. Escrow Deposit : This section outlines the buyer's obligation to deposit a specified amount of money with the escrow agent within a certain number of days after signing the Purchase Agreement. It also requires the seller to deposit certain documents related to the property with the escrow agent within a specified time frame.

  3. Escrow Agent Responsibilities : This section details the escrow agent's duties, including holding and disbursing funds and documents according to the agreement, distributing any interest earned on the deposit, and communicating with the parties about any attempts by third parties to access the deposit.

  4. Release Conditions : This section explains the conditions under which the escrow agent will release the deposit and documents to the parties. It specifies that the deposit and documents will be released upon the closing of the Purchase Agreement or upon its termination, according to the terms of that agreement.

  5. Fees and Expenses : This section states that the escrow agent is entitled to reasonable fees and expenses for their services, which will be paid according to the Purchase Agreement or as agreed upon by the parties. If the Purchase Agreement does not specify how fees and expenses will be divided, they will be split equally between the buyer and seller.

  6. Indemnification and Liability : This section requires the parties to indemnify and hold the escrow agent harmless from any losses, claims, damages, or liabilities related to their performance of their duties, unless those issues arise from the escrow agent's gross negligence or willful misconduct.

  7. Dispute Resolution : This section outlines the process for resolving disputes between the parties regarding the escrow deposit or documents. It allows the escrow agent to continue holding the deposit and/or documents until they receive written instructions from both parties or a court order. It also allows the escrow agent to deposit the funds and/or documents with a court and initiate an interpleader action to resolve the dispute.

  8. Governing Law and Jurisdiction : This section states that the agreement will be governed by the laws of the United States and the state where the property is located. It also establishes the exclusive jurisdiction of the state and federal courts in that state for resolving disputes related to the agreement.

  9. Miscellaneous : This section includes various provisions related to the binding effect of the agreement, amendments, and the entire agreement between the parties. It states that the agreement is binding on the parties and their successors and assigns, can only be amended in writing, and represents the entire understanding between the parties regarding the subject matter.

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