Whenever any real estate changes hands or gets refinanced, the closing typically happens through some form of third-party escrow. The seller signs the transfer or mortgage documents and gives them to a trusted third party, the “escrowee.” The buyer or new lender gives the escrowee some money. The escrowee then makes sure the closing conditions are satisfied and records the documents. Finally, the escrowee releases the purchase price or loan proceeds and everyone lives happily ever after.
This all works really well as long as the escrowee doesn’t take the money and run. Sometimes that happens, though, as shown in a recent Washington State case.
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