Double escrow is a set of
real estate transaction
A real estate transaction is the process whereby rights in a unit of property (or designated real estate) is transferred between two or more parties, e.g. in case of conveyance one party being the seller(s) and the other being the buyer(s). It can ...
s involving two
contracts
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to ...
of sale for the same property, to two different back-to-back buyers, at the same or two different prices, arranged to
close
Close may refer to:
Music
* ''Close'' (Kim Wilde album), 1988
* ''Close'' (Marvin Sapp album), 2017
* ''Close'' (Sean Bonniwell album), 1969
* "Close" (Sub Focus song), 2014
* "Close" (Nick Jonas song), 2016
* "Close" (Rae Sremmurd song), 201 ...
on the same day. At close of
escrow
An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacti ...
, all participants, lenders, sellers, buyers and brokers are informed of all parties involved and all monies that change hands.
For example, a double escrow might be arranged in which Alpha sells Greenacre to Beta, the
sale
Sale may refer to:
Common meanings
* Sales, the exchange of goods for profits
* Sales, discounts and allowances in the prices of goods
Places
*Sale, Victoria, a city in Australia
*Sale, Myanmar, a city
*Sale, Greater Manchester, a town in Engla ...
to close at 10:00 am this morning; and Beta then immediately sells Greenacre to Gamma at 2:00 pm this afternoon. Because the two escrows are arranged to close back-to-back on the same day, they are regarded as one "double escrow."
If the underlying purpose of the double escrow is legal, the double escrow will be legal. If the double escrow is undertaken for a criminal purpose, it will not be legal. Otherwise, whether legal or not, a double escrow may not be physically possible.
By definition, both escrows must close on the same day, or it is not "double" escrow but two single escrows. The second sale cannot close until the deed from the first sale is recorded, which means the deed must be recorded on the same day that both closings happen. If a county clerk or recorder's office has a 10:00 am deadline for same-day recording, and if the first sale does not close until after that deadline; then the deed will not be recorded until the next day, and the second escrow cannot close on the same day as the first. This is one situation in which double escrow is impossible.
Another, possible more common reason for double escrow to be impossible is that the county clerk's office might not do same-day recording of deeds, especially if the county is understaffed. Many counties have a time lag of several days to several weeks (even a month or more) between accepting a deed for recording and actual recording (as of the date it was received). In these jurisdictions, double escrow will be completely impossible because the back-to-back sales may not even close during the same week or month, let alone on the same day.
{{DEFAULTSORT:Double Escrow
Property law legal terminology
Real estate in the United States