As a home buyer or seller, one of the most important decisions you’ll make is choosing an escrow agent to manage the transaction. Escrow agents are responsible for holding funds and documents in a real estate transaction until the deal is closed. They play a vital role in ensuring that all parties involved in the transaction are protected.
However, not all escrow agents are created equal. Some unscrupulous agents engage in a practice known as “double dipping” that can cost you thousands of dollars. In this article, we’ll explain what double dipping is and how to protect yourself from this unethical practice.
What is Escrow Double Dipping?
Double dipping occurs when an escrow agent collects fees from both the buyer and seller in a real estate transaction. For example, an agent might charge the buyer a fee for holding and disbursing funds, and then charge the seller a similar fee for the same service.
This practice is not only unethical, but it’s also illegal in many states. Additionally, it can cost you a significant amount of money, as you could end up paying twice for the same service.
How to Protect Yourself from Double Dipping
The best way to protect yourself from double dipping is to do your research before choosing an escrow agent. Look for agents who are licensed and experienced in your state, and who have a reputation for honesty and integrity. You can also ask for referrals from your real estate agent or attorney.
Once you’ve found a potential escrow agent, ask for a detailed breakdown of their fees and services. Make sure you understand exactly what you’ll be paying for, and ask if there are any additional fees that may be charged.
If you suspect that your escrow agent is engaging in double dipping, don’t hesitate to speak up. Contact your real estate agent or attorney, or file a complaint with your state’s Department of Real Estate. You may also want to consider hiring a new escrow agent to manage the transaction.
Other Tips for Choosing an Escrow Agent
When choosing an escrow agent, there are several other factors to consider besides double dipping. These include:
- Experience: Look for an agent who has experience with transactions similar to yours.
- Communication: Choose an agent who communicates clearly and promptly throughout the transaction.
- Technology: Look for an agent who uses modern technology to streamline the escrow process.
- Availability: Choose an agent who is available when you need them, and who is willing to work around your schedule.
Conclusion
Choosing the right escrow agent is essential for a smooth and successful real estate transaction. Don’t let double dipping ruin your deal – do your research and choose an agent with a reputation for honesty and integrity. By following these tips, you can protect yourself from unscrupulous escrow agents and ensure a successful transaction.