PayMaster & escrow services are very important when individuals and organizations enter into transactions with a lot of money at stake. Without escrow services, many deals could not be completed because parties would not have the confidence of knowing that money was available yet safe until the deal was done.
Choosing the right PayMaster to facilitate escrow transactions is essential in order to give the involved parties faith in the escrow system and to ensure that substantial sums of money are truly safe. Nehoray and Drake, LLP can help. Our firm can draft escrow agreements, maintain and reconcile accounts, and do much more. Give us a call to find out about our PayMaster and escrow services and to get answers to important questions including:
- When are PayMaster and escrow services needed?
- Who should you choose as a PayMaster when you need escrow services?
- How can a PayMaster help you with escrow services?
When are PayMaster and Escrow Services Needed?
When large transactions take place and substantial amounts of money are at stake, escrow can protect the interests of the parties involved in the deal. An escrow account is created, with the buying party putting in a sum of money. This ensures the selling party that funds are available to continue with the transaction. Provided the deal is successfully completed and the goods are as promised, the money can be released from escrow to the seller.
If a problem occurs and the deal breaks down, the money in escrow could be returned to the potential buyer. However, if it was the buyer who violated the terms of the deal, some or all of the money in the escrow account could be paid to the seller as a penalty for the breach.
Escrow makes big financial deals possible in a wide variety of different situations. Real estate sales are a common situation where escrow is used, with buyers placing a deposit in escrow after an offer on a property is accepted. Commodities and banking transactions; oil and jet fuel sales; sales of gold and other precious metals; and diamond transactions are all additional examples of situations where escrow may be necessary.
When escrow is required as a part of a deal, a PayMaster Attorney may be hired to serve as an arms-length party with no interest in the transaction who can be counted on to serve as a trustworthy and neutral third party. The PayMaster takes responsibility for holding the funds and distributing the funds as appropriate to the parties involved in the transaction.
Who Should You Choose as a PayMaster When You Need Escrow Services?
Selecting a PayMaster to oversee and facilitate transactions involving escrow can be vitally important. The PayMaster has a lot of important roles to fulfill during the transaction. The right PayMaster can:
- Create a multi-lateral escrow agreement: You need a skilled attorney to provide assistance in drafting an understandable and enforceable agreement that makes clear what the terms of the escrow transaction are. This agreement will dictate what happens to the money in the escrow account, including when and under what circumstances the money is released to which party.
- Reconcile escrow accounts: PayMasters must maintain the money in escrow carefully, must keep a careful accounting of money going into and out of the account, and must be able to determine whom money is due to.
- Comply with tax obligations: A PayMaster can complete IRS requirements and prepare tax forms.
PayMasters are not party to the transactions that the escrow is necessary for. PayMasters may not know the specific dates or times when transactions close. However, PayMasters are responsible for ensuring sufficient funds are transferred into escrow and must comply with the directions of the parties to the transaction for the distribution of escrow funds.
PayMasters are charged a small commission for the important services that they provide. You can shop around to find out the cost of working with a PayMaster as you make your selection of who should fill this role. However, remember that cost is not the only deciding criteria and it can be more important to have someone whose legal knowledge and integrity you can trust.
How can a PayMaster Help With Escrow Services?
Nehoray and Drake, LLP provides escrow and PayMaster services for a wide variety of transactions. To find out more if our services can be of use to you in your business or investment deals, and to get started working with an experienced PayMaster, give us a call today.