Escrow Agent Bond Guide
Many states require surety bonds for escrow agents as a licensing requirement. Learn how to navigate the bonding process and apply for the surety bond you need with this guide.
Bond Overview
- Purpose: To protect customers if an escrow agent commits malpractice
- Who Needs It: Escrow companies in charge of holding funds or assets for the duration of a contract or transaction
- Required Amount: $50,000–$100,000, varies by state
- Regulating Body: The state department of banking, financial institutions or real estate
- Premium Rates: Typically 0.5–10% of the bond amount, credit-based
What Are Escrow Agent Bonds?
Escrow agent bonds protect customers by ensuring that escrow agents provide legal and ethical services. Exact laws vary by state, but the surety bond allows for financial repercussions if an escrow agent commits any malpractice or fails to do any of the following acts:
- Providing escrow records as requested by law or peace officers
- Depositing all funds in escrow into a bank or loan association
- Keeping a separate ledger for each account
- Maintaining all disbursements and receipts
- Submitting tax information to the proper government division
If an escrow agent breaks any laws and a valid claim is made against the bond, the surety will cover damages up to the full bond amount. The principal is then required to compensate the surety in a timely manner.
How Much Do Escrow Agent Bonds Cost?
Your escrow agent bond cost will vary depending on your location and the required bond amount. Most states — including Arizona, New Mexico, Montana, and Nebraska — require a $100,000 bond for escrow agencies and companies. Other states have lower penal sums, such as the $50,000 Oklahoma escrow agent bond or the $25,000–$50,000 California escrow licensee bond.
Premiums are calculated as a percentage of the total bond coverage, typically 0.5–10% based on creditworthiness. For example, the $100,000 Arizona escrow bond starts at $500 for applicants with excellent credit. Apply now to get your free escrow agent bond quote.
Who Needs an Escrow Agent Bond?
An escrow agent is a third party in charge of holding funds or other assets while a contract or transaction is being fulfilled. Escrow agent bonds are a licensing requirement in Oregon, Nebraska, Montana, Texas, California, New Mexico and Arizona. Select your state below to learn more and escrow agent bonds in your location.
How Do Escrow Agent Bonds Work?
Escrow agent bonds join three parties in a legally-binding contract:
- Principal: The escrow company or individual agent filing the bond.
- Obligee: The state government entity requiring the bond.
- Surety: The company issuing the bond to the escrow company.
If you, as the principal, break the bond terms, the surety will pay valid claims to any parties harmed as a result. You must then repay the surety in a timely manner.
How to Get an Escrow Agent Bond
SuretyBonds.com offers the fastest and easiest way to get escrow agent bonds online. Submit a quote request form today and we’ll reach out with your free quote within one business day or less. You can then purchase your bond online and we’ll deliver it via mail or email, depending on the obligee’s requirements.
How Do I Renew My Escrow Agent Bond?
You’ll need to renew your escrow agent bond annually. If you purchased your bond from SuretyBonds.com, we’ll send you renewal reminders and an invoice starting 90 days before your expiration date. Simply pay your invoice and follow any additional instructions to maintain your bonded status.
Can I Get an Escrow Agent Bond With Bad Credit?
Yes, we work hard to approve 99% of applicants for the bond they need. Even if you have bad credit, we’ll search our nationwide network of surety markets to find the best available option for you. Learn more about our bad credit bonding program or apply now to get started.
