What is Escrow?  Some of you from States like New York or Virginia may not be familiar with what an escrow is.  In escrow states like Hawaii, large companies have been set up to facilitate the transfer of property from one person to another.  Most of these companies have been set up by title insurance companies, but not all.  These companies are bonded and insured to protect the clients funds deposited with them.  This way you don’t have to give a hefty deposit to a seller and trust that he will transfer the property into your name.  The seller doesn’t have to trust that the buyer will come through with the rest of the cash after title transfers.  The escrow company also sorts and organizes all the paperwork and notifies all the parties when certain things are due, like a termite report or a survey.  They also distribute funds from the deposits they have collected to pay the termite inspector, home inspector, condo association, surveyor, etc.  They also make sure that attorneys draft all the deeds and conveyance documents for recordation at the Hawaii State Bureau of Conveyances on Oahu.  There is a fee to the both the buyers and the sellers associated with the escrow, so in effect, the escrow company is working for both the buyer and seller.  At the end (called “closing” in Hawaii), a breakdown of all the monies collected and disbursed is provided to all parties.