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5 Reasons to Use An Escrow As Protection Against Fraud


Escrow plays an important role in the home selling/buying process. Escrow companies provide financial protection to home buyers and sellers. In this article, we have discussed the top 5 reasons to use an escrow company to protect yourself against fraud:


One of the main reasons to use an escrow company is to protect yourself against fraud. If the escrow company has been in business for several years, then it understands the real estate business. 

It is, therefore, easier for this company to find fraud. It is beneficial to have this knowledge. The escrow company can back your transaction to give you peace of mind and keep you safe from fraud. 


A few people do not use the services of an escrow holder to close their real estate deals. It is much safer to use a neutral third party since it reduces the risks. The escrow payment will be held by the company in an escrow account and ensure the buyer and seller have recorded everything as required. 

It also ensures that the buyer and seller meet all obligations before money or documents exchange hands. It holds the money and documents, so buyers and sellers do not even have to trust each other. They can trust the escrow company. It is, therefore, beneficial to use an escrow company to protect yourself against fraud. 

In addition, an escrow company uses a reputable escrow service to protect and secure the personal information of the buyer and seller. The personal information can include; credit and loan account numbers, social security numbers, and bank account numbers. 

Wire Transfer Fraud Protection 

Homebuyers can lose their money through wire fraud. You can, therefore, use an escrow company and do your business in a physical office to protect yourself against wire fraud. 

Escrow companies have physical offices. You can call them or visit their physical offices to meet and talk to them. They can reduce your chances of losing your money through wire transfers 

If you want to do business with an escrow company, you can call the company to ensure you are receiving legitimate digital information. If you are not careful online, you can get messages from fraudsters. These messages look legitimate. It is, therefore, necessary to check with your escrow company to ensure their messages are legitimate. 


It is beneficial to use an escrow company since it allows you to follow the escrow process to know where you are in the process. The buyer and seller must meet several obligations before closing the deal. It is the responsibility of the escrow company to ensure the buyer and seller meet these obligations. 

An escrow company uses an escrow agent to track these obligations and know when the buyer and seller must accomplish them. You will know what you need to do. You must do these things for the escrow process to move. 

If you do not understand some things, you can ask the escrow company for clarification. The escrow company monitors the whole escrow process to spot red flags. Monitoring the whole process protects buyers and sellers from fraud. 

Party Verification 

Escrow companies verify the parties involved before beginning the real estate transaction. They do the verification to ensure they are dealing with real people and protect themselves from fraudulent scams. 

The company has a team of professionals. The team does the party verification and checks for red flags. If one of the parties is up to something, they can stop the real estate transaction.

More on this topic: 

How to Get a Home Loan While Selling Your House

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