Here's how real estate escrow save you from scams

Picture this - you've found the perfect house or office space, and have the required deposit or down payment to seal the deal. Then, you transfer the money through bank transfer or UPI to the seller you've been in constant touch with for weeks. The agent receives the money and promises to hand you the property in the next few days, stating that some last-mile formalities need completion.

So, you wait, and on the day you were supposed to hear back from the real estate agent, all you get is radio silence in return. The agent is unreachable, and there is no trace of him, except that you now know with certainty that you were being duped all this while!

Heartbreaking scenarios like these play out more often than we hear about them, robbing Indians from various walks of life of their hard-earned savings and dreams of owning a home, renting a better apartment, or leasing a commercial space. Fortunately, the advent of digital escrow services in India can safeguard the interests of both real estate buyers and sellers alike.

Here, Vineet Singh, Founder & CEO of Castler, a leading digital escrow platform in India, sheds light on how trusted, transparent and secure escrow services can save you from real estate scams. Castler is a global escrow platform offering domestic and cross-border escrow solutions.

Digital escrow is a secure and efficient online service for holding, releasing and managing funds and documents between two transacting parties. An escrow account enables an unbiased third party, i.e., the escrow agent, to secure money or assets in their custody until all conditions regarding a specific transaction have been fulfilled.

The buyer and seller can mutually agree to use a digital escrow service in a real estate transaction. The buyer has to deposit the purchase price into the escrow account managed by the escrow service. The escrow agent verifies that the funds being held in escrow are from a legitimate source. In addition, the digital escrow provider ensures that all terms and conditions have been satisfied, before releasing the funds. This added security and protection can help to mitigate the risk of fraud and other scams in real estate deals. It also provides added convenience as transactions can be completed online.

Digital escrow can be used in a wide range of transactions, including property purchases, resale transactions, auction sales, property development, lease contracts, and property sales by banks, among others.

An escrow agreement is provided for the buyer and seller to sign, which outlines the terms and conditions of the escrow, including the responsibilities of the escrow service provider, the buyer, and the seller. The escrow service provider will require identification documents from both the buyer and seller, such as a government-issued ID, proof of address, and other required documents for e-kyc and e-agreement. The buyer then deposits the purchase price into the escrow account. This can be done online or by wiring the funds to the escrow account. Once the escrow account is funded, it is officially open.

A digital escrow service protects transacting parties in a number of ways. Firstly, escrow ensures the buyer's funds are released to the seller when all agreement terms have been met and the property transferred. In this way, the buyer is assured that they won't lose their money if something goes wrong. Escrow services protect sellers by verifying that funds in escrow are legitimate and that the buyer can complete the transaction.

For the seller, this provides added security, as they can ensure that the buyer has the funds needed to complete the transaction. Protection is provided for both parties by ensuring that all necessary documents, such as deeds and titles, are in order before funds are released. It can prevent disputes over property ownership or other issues that may arise after the sale. Both parties are protected from fraud by having a neutral third party hold onto the funds, providing a secure and transparent transaction platform. Finally, escrow service helps ensure that all steps of the transaction are followed correctly, reducing the possibility of errors that could delay or complicate the transaction.

Digital escrow services can be accessed from anywhere, making them especially useful for remote transactions or involving parties in different locations. Overall, the implementation of digital escrow can prove to be a game-changer for the Indian real estate market by improving trust and transparency in the ecosystem.