What do escrow instructions typically describe?

Escrow instructions primarily outline the role and responsibilities of the escrow agent during a real estate transaction. These instructions serve as a guide for the escrow agent, detailing the steps they must follow to ensure that all aspects of the transaction are handled properly. This includes managing the collection and disbursement of funds, ensuring that documents are executed and recorded correctly, and maintaining communication between all parties involved (the buyer, seller, lender, and any other relevant parties).

These instructions will typically specify the conditions that must be met before the transaction can close, ensuring that both parties fulfill their obligations. This ensures a smooth and secure transfer of property, which is essential in protecting the interests of all involved.

In contrast, the other options focus on specific components of the transaction but do not capture the overarching purpose of escrow instructions. Closing costs are a separate financial aspect, the terms of the mortgage relate to financing rather than the escrow process, and property valuation is a distinct procedure used to determine the worth of the property, not something outlined within escrow instructions.