Escrow Agreement 2
Escrow Agreement 1
Escrow Agreement 2
Escrow Agreement 1

Escrow Agreement

    Escrow agreements are fundamental to successful transactions in real estate, property acquisition, freelancing and indeed, anywhere else. This is because they highlight in clear terms what conditions must be met before pay for a job done/material supplied is released by a third party agent - an escrow - to the buyer or contractor. Utilize our professional template to customize your own escrow agreement now!

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Escrow Agreement
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Escrow Agreement

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The term ‘Escrow’ originally refers to a formal instrument or deposit of a document but nowadays, it is used to describe money deposits. So, it means that anything having value in money can be transacted against escrow, like deed, bond, stock, written instrument, etc.

So, if you are getting into any transaction and planning to pay escrow, then you should sign an escrow agreement in order to clear everything right from the beginning.

What Is an Escrow Agreement?

This type of agreement is created to define understanding and arrangements between parties, when one agrees to deposit an asset to a third party (an escrow agent) who acts as an intermediary in the agreement.

The asset will then be transferred to the second party under certain conditions. Basically, the escrow agreement highlights the terms and rules to be followed by both parties because they both are responsible for their successful execution.

An escrow contract is normally required for real estate transactions and includes personal details of the contracting parties with escrow clauses along with the escrow agent involved in the transaction.

The party who is going to make a deposit (either as an asset of funds) is referred to as a depositor. This deposit is handed over to the escrow agent who will, later on, transfer them to the beneficiary once the conditions are fulfilled.

Escrow agreements usually involve a number of financial transactions, especially when dollar amounts are involved in online sales or real estate.

Download a Free & Professional Escrow Agreement Sample Now!

Even old-time business associates have disputes over transaction payments. Since you can download one for free on cocosign, why not download, customize and fill an escrow agreement template and save your business relationship today.

Download one for free now by clicking on the button below!

Who Uses an Escrow Agreement?

When it comes to exploring the usability of escrow agreement formats, business deals emerge as the first beneficiary, where one party has to be cured about the fulfillment of obligations by the other party.

For instance, sellers must get the surety of being paid by the buyers and this is where escrow agreement comes in. The agreement is created when the buyer agrees to send escrow along with details of when and how the remaining disbursement will be made.

Here, attorneys will be the escrow agents who are bound by certain terms of the agreement as well. In the stocks/securities industry, an escrow agreement to hold funds is needed to deal in stocks.

They are used against initial public offerings or when stock option plans are granted. The reason why escrows are needed for stocks is that they enable owners to hold the instruments for a minimum time period until they get the chance to trade them freely.

For a real estate deal, an escrow agreement template involves the following as escrow agents:

  • Notaries
  • Attorneys
  • Title agents

They are responsible to hold the deed until the buyer performs due diligence like inspection in order to be sure about what they are getting. This agreement is useful to ascertain that both parties are capable of bringing their deal to an end.

What Is Included in the Escrow Agreement?

When two parties agree to transact, they have to mutually decide some terms and conditions, which they both have to follow until the agreement will come to an end. Typically, the escrow instructions template comprises of the following parties:

  • Depositor
  • Beneficiary
  • Escrow agent

The agent is responsible to take over the asset or funds from the depositor and keeps in custody until the seller meets all conditions mentioned in the agreement. Other than that, the escrow agreement explains the following information for the three parties:

  • Details of depositor, beneficiary and escrow agent
  • Important expressions/clauses in the agreement
  • Amount of escrow funds along with date, time and place
  • Conditions to be met to release the escrow
  • Agent’s acceptable use of funds/assets
  • Agent’s liabilities and obligations
  • Agent’s fees and expenses
  • Venue and jurisdiction, if there is a breach of terms

When the parties are unsuccessful to meet the conditions and the case is brought to the court, the parties have to try their level best to complete the performance criterion because without this, the court will not instruct to release the deposit.

Though, they can give a certain time period for their performance. The parties will then have to adhere to the time or else, the rights of the first party will be forfeited for the property in escrow.

Download a Free & Professional Escrow Agreement Sample Now!

Even old-time business associates have disputes over transaction payments. Since you can download one for free on cocosign, why not download, customize and fill an escrow agreement template and save your business relationship today.

Download one for free now by clicking on the button below!


With all these details about escrow agreements, it would be quite easy for you to figure out how you will have to proceed with the terms and conditions.

However, in case of any confusion or doubt about any escrow clause, CocoSign is 24/7 ready to assist you. It’s just a matter of a few minutes and one of our experts will be at your service.




 This agreement, made this _____ day of _______________, 20___, by and between the following:


__________________________________________________________________________ (Hereinafter collectively referred to as “Owner” or “Seller”); and


__________________________________________________________________________ (Hereinafter collectively referred to as “Buyer”); and


Commerce Title and Abstract Company (Hereinafter referred to as “Escrow Agent”),


 The Buyer(s) and Owner/Seller(s) described above have entered into an Agreement to Sell and Buy property located at _______________________________________________, hereinafter referred to as the “Property.

A deposit has been tendered by the Buyer(s) pursuant to the contract referenced hereinabove and either:  (1) there is no brokerage firm participating in the transaction (i.e, FSBO); or (2)  the  brokerage firm representing the Seller has refused to hold the said deposit.


It is desirable to place the deposit (Hereinafter referred to as the “Escrow Funds”)    tendered by Buyer(s) into a third party escrow account pending the closing and the Escrow Agent has agreed to act as such for the benefit of parties hereto.


It is hereby understood and agreed, and the parties hereto do hereby specifically direct the Escrow Agent, upon receipt of the Escrow Funds, to deposit same into a non-interest bearing account maintained at a federally insured lending institution.


 WHEREAS, IT IS HEREBY understood and agreed that the Escrow Funds will not be released by the Escrow Agent, except as follows:


  1. The Escrow Agent receives notification from the Owner, Listing Agent, or Buyer’s lender that the Escrow Funds shall be applied to the purchase price at closing on a particular date, and that closing occurs; or


  1. The Escrow Agent receives notification from the Owner, Listing Agent, or Buyer’s Lender that the Escrow Funds shall be returned to the Buyer at the closing on a particular date, and that closing occurs; or


  1. The Escrow Agent receives notice in writing from the Buyer’s lender that the Buyer will not receive approval for financing, and, if there is a financing contingency clause in the Agreement to Purchase and Sell, the Escrow Funds shall be disbursed to the  Buyer without any further consent required  by the Seller or the Listing Agent; or


  1. The Escrow Agent received written instructions from both the Buyer or Selling Agent and the Owner or Listing Agent authorizing the disbursement of the Escrow Funds in the event of a cancellation of contract, in which case the Escrow Funds will be disbursed according to the written mutual agreement of the parties.



In the event that the parties have expressed disagreement on how the Escrow Funds are to be disbursed, the Escrow Agent shall be entitled, at its sole discretion, to either:  1)  Disburse the Escrow Funds  in accordance with the Escrow Agent’s interpretation of the contract and the facts pertaining to said disagreement;  or 2)  Initiate a concursus proceeding and deposit the  Escrow Funds into the registry of the court in the parish where the property is located, the cost of which shall be borne by the Buyers and Owner/Sellers; or 3)  Maintain the Escrow Funds in hopes of a resolution amongst the Buyers and Sellers, until enough time has elapsed to escheat said funds to the State of Louisiana. 



 NOW, THEREFORE, the parties agree as follows:


 In consideration of the Escrow Agent acting for the benefit of and at the request of the Buyer(s) and Owner(s)/Seller(s), any third party beneficiary to this agreement, the parties hereto shall and do at all times hereafter well and sufficiently save, defend, keep harmless and indemnify the Escrow Agent, from all loss, damage, cost, charge, liability or expense, (excepting therefrom any loss, damage, costs, charge, liability or expense resulting from Escrow Agent’s willful misconduct or gross negligence) including but not limited to, court costs and attorneys’ fees, which may result from the obligation and duty as Escrow Agent accepted by the said Escrow Agent, including but not limited to, situations in which disputes arise concerning amounts of money to be paid over, funds available for such payments, or the proper persons to whom payments should be made, and including, but not limited to, a delay in the electronic wire transfer of funds.


 FURTHER, it is understood and agreed that the Escrow Agent is acting as a stakeholder only, and in no way purports to legally represent either party, and shall have no liability to Buyer(s), Owner(s)/Seller(s)  or any third party beneficiary to this Agreement for its actions or inactions hereunder unless such action was taken in, or such inaction resulted from gross negligence, willful misconduct, or bad faith.  In no event, however, shall the Escrow Agent have any liability hereunder for any amount in excess of the Escrow Funds maintained for any particular third party.


 FURTHER, it is understood and agreed that Escrow Agent shall not be bound by any modification of this Agreement or of any agreement incorporated by reference herein, unless there shall have been delivered to the Escrow Agent a written modification signed by the buyer(s), Owner(s)/Seller(s) and any relevant third party beneficiary.  No such modification shall, without the written consent of the Escrow Agent, modify any of the provisions of this Agreement relating to the rights, obligations or duties of the Escrow Agent.



 FURTHER, we the undersigned, do hereby certify that we are aware that the Federal Deposit Insurance Corporation (FDIC) coverages apply only to a maximum amount of $100,000.00 for each individual depositor.  We further understand that certain banking instruments such as, but not limited to, repurchase agreements and letters of credit are not covered at all by FDIC Insurance.  Further, we understand that Escrow Agent assumes no responsibility for, nor will be held liable for, any loss occurring which arises from the fact that the amount of the above account may cause the aggregate amount of any individual depositor’s accounts to exceed $100,000.00 and that the excess amount is not insured by the Federal Deposit Insurance Corporation (FDIC), or that FDIC insurance is not available on certain types of bank instruments.


 THE EFFECTIVE DATE OF THIS AGREEMENT is on the date executed by all parties.  In the event that said two parties execute the Agreement on different dates, then the date of execution by the last party to sign will be the effective date.






__________________________________  ________________________________

Buyer:       Seller:




__________________________________  _________________________________

Buyer:       Seller



IN WITNESS WHEREOF, by the Escrow Agent, who has executed this Agreement on the date hereinbelow written:








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