Who is More Important…The Real Estate Agent, The Lender, or The Escrow Officer?

Westcoe Realtors, Riverside California…Wow…a seriously loaded question here. In a light-hearted conversation with one of our clients after we closed a rather difficult escrow this week, our client asked the above question. Understand, it had taken Herculean efforts on all 3 entities above to successfully get this transaction closed, but his question was legit. He really wanted to know who was more important in a “normal” escrow…the real estate agent, the lender, or the escrow officer. This is like asking a presidential candidate which state he/she likes the most…you will never get a straight answer.

However, undaunted, we will venture where no politician will ever go, and we will attempt to give our client an answer here.

So…here we go. Which part of a successful sale and closing is most important? It depends on when you ask the question…and here is why.

In the beginning of the purchase/selling process (let’s call this phase one), the most important person is the Real Estate Agent. In representing the buyer, they need to scour every available source of homes for sale, arrange showings, narrow down what a buyer wants, begin the financing process, run comps to support an offering price, and a thousand other small items that will all add up to a successful sale.

If the agent is representing the seller, then they must also know every home for sale that is similar to the sellers, they must also run all comparable comps to get a realistic sales price, handle all marketing materials, arrange any inspections or repairs that may be necessary, handle any agent open houses or showing, explain to the seller a myriad of disclosures and documents, and they too have a thousand other things that need to happen to make everyone eventually happy.

In phase two (once an offer has been accepted by buyer and seller), now it’s the lenders turn to be the alpha dog. Don’t get us wrong…the agents still have plenty to do, but the bottom line here is that this transaction will only go as far as the lender will take it. In other words, the buyer, seller, and agents can say and do all they want, but if the lender says “no” to the loan, then everything else is simply words in the air. Unless the buyer is paying all cash for the home (not very often), then the lender has the ultimate say in whether this home will close escrow. This is why real estate agents are so invested in the lender. They know that a lender who can deliver what they promise is the straw that stirs the drink at this point, and empty promises waste a lot of time.

In phase three (once the buyers loan has been approved), then the escrow officer moves to the front of the line. Trust us…they have been busy with a lot of technical “stuff” up to this point, but now that the time is near to actually make all this happen, the escrow officer is definitely driving the bus. To close an escrow, there are about 100 things that all must happen in a very particular order, and many of these 100 things are time sensitive. A good officer keeps everything in line, keeps the line moving, and makes sure all parties do what they are supposed to do, when they are supposed to do it. Herding cats is a picnic compared to what an escrow officer does…and if they drop the ball, it can get very ugly. Picture a juggler with 5 bowling pins in the air….pretty cool when it works, and not so pretty when one (or more) pins gets out of position.

So…the moral of this story is not that we took the political way out and refused to answer our question. To the contrary, what is important here is that all 3 major players in a real estate transaction…the agent, the lender, and the escrow officer…MUST work together or it’s a hot mess. No one gets to play the diva card, and when all 3 are totally on the same page, then making all this work and having the escrow close is a thing of beauty…and in the case where one or more simply can’t do their job, then this is the stuff of real estate nightmares. Let’s hope you get to experience the former…because the latter is really no fun.

Take care, and as always, thanks for reading our blog.

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