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Escrow fees are charges an escrow business sets for its services. These fees are typically charged to cover the expenses the escrow company has as part of running a business, including overhead costs, and providing escrow services. Escrow fees may also be based on the liability the escrow service takes on as part of providing its services. In most places, escrow service fees are not regulated by any kind of government authority, which means these fees may vary from escrow service to escrow service. The average escrow fee may also vary based on the country in which services are provided, the amount of money involved in the transaction, and the type of transaction.
An escrow service is a company that acts as a middleman for transactions between two parties. When an escrow service is used in a transaction, a buyer doesn't give the money for the purchase of a product or service directly to the seller. Instead, the buyer gives his money to an escrow service to hold until the transaction is completed successfully. Essentially, this type of service is used as a safety mechanism to ensure that a transaction goes smoothly, the buyer gets the product or service he is expecting, and the seller gets the right amount of funds. An escrow service can be used in just about any type of transaction, but they are most commonly used in transactions that total $500 US dollars (USD) or more.
Since escrow fees vary from company to company, an individual who needs to use such a service may request fee schedule information and compare prices before choosing a service. Often, an escrow service charges fees according the minimums listed on its schedule. In some cases, however, the fees a party is charged may be more than the amount listed on the schedule. This may occur, for example, when there are extra or special expenses related to a particular type of transaction. An escrow service should be upfront in discussing any additional fees with its customer so the person has an opportunity to change his mind before the transaction is already in progress.
When an escrow service is used, the parties involved in the transactions have to decide who will be responsible for the payment of escrow fees. This is usually part of the negotiations of the transaction. The buyer or seller can agree to pay the fees, or the each party in the transaction may agree to pay a portion of the fees involved.