The escrow instructions represent the written authorization of the buyer, seller, and lender for the escrow company to close the transaction. These instructions are prepared by the escrow officer using all of the information in the real estate sale agreement and other documents. The result is a set of instructions (usually on a preprinted company form) specifying all of the conditions that must be met in order for escrow to close.

Escrow instructions are not always prepared by the escrow provider. For example, in transactions where an attorney is involved, the attorney might prepare all or a portion of the escrow instructions. Escrow instructions can be unilateral or bilateral. If the instructions are unilateral, both the buyer and the seller will have prepared their own escrow instructions. Generally, these unilateral instructions are only found in complex transactions when the parties are represented by attorneys.

Most residential transactions use a bilateral instruction format. This means that both the seller and the buyer sign the same set of instructions that are prepared by the escrow company on their standard, preprinted company form, after all of the information has been received and the transaction is about to close.

The escrow instructions include the following:

• A detailing of the money to be deposited into escrow such as the amount of the earnest money deposit and any additional monies required prior to closing.