How To Hire an Escrow Service

If you need to hire an escrow service, there are a couple of things to keep in mind. Escrow companies can be somewhat specialized. Here's how to make sure you hire a reputable one.

If you need one to buy a piece of artwork, you may want to look for one that handles those types of transactions. Most of us are familiar with using an escrow company to buy a house. But there are plenty of other reasons to use an escrow company. If you buy a car online, you might wish to use an escrow company. Buying or selling a business will almost always go through an escrow company. But where should you start?

If you're buying a house, you will probably have the escrow company chosen for you by your agent or lender. But for most other transactions, you'll have to make the choice. Recommendations are always a good place to start. Ask an agent who they would recommend. You can also use the yellow pages or search online. 

If you are looking online, you may want to check escrow.com. As a division of Fidelity, it might provide some reassurance that the listed firms are legitimate. As always though, you should thoroughly check out any firm you choose. After all, you are trusting them with your money, whether you are the buyer or seller. Another place you may want to check is Escrow-fraud.com. Remember that these sites are almost never totally comprehensive, but they should certainly be a good place to look. You can eliminate some of those companies that have been known to have had prior complaints.

Depending on what you're doing, you might want to look specifically for an online escrow service. Again, a referral may be the best way to find a company. If one of the major online auction Web sites uses a particular escrow company, you may be more comfortable knowing that they're legitimate.

Most people aren't going to use an escrow service unless they are buying or selling a high dollar item. If either the buyer or the seller is concerned about the safety of the transaction, it might be good to use an escrow service. The buyer will deposit the funds with the escrow service then the escrow service will authorize the seller to ship the item. Once the buyer has received the item, the escrow company is authorized to release the funds to the seller. Often the buyer has the opportunity to inspect the item prior to that authorization. This is all designed to give both the buyer and the seller a measure of comfort that they won't be stiffed during the transaction. The advantage here is that an objective third party is actually directing the transaction. It helps to keep both the buyer and the seller safe.

Once you find a company, you'll need to find out how they will process the transaction. Whoever hires the company will have to pay a fee or you may agree to share the fee with the person on the other half of the transaction. Then the escrow company will set up the terms of the transaction. From there, just follow the instructions.