What are escrow instructions?

Escrow instructions are written guidelines provided to the escrow agent that outline how to carry out a real estate transaction. These instructions detail the specific terms agreed upon by the buyer and seller, including the conditions that must be met for the escrow agent to release the funds and transfer the property title. Having these instructions in writing ensures that all parties involved have a clear understanding of their obligations and the process, helping to protect their interests during the transaction. Well-documented escrow instructions help avoid misunderstandings and disputes while ensuring compliance with legal requirements.

The other options represent different concepts in real estate transactions. Oral agreements, while potentially valid in other contexts, are not reliable for escrow purposes since they lack the specificity and formal acknowledgment necessary for legal transactions. Contracts signed at closing would generally pertain to the overall agreement between the parties rather than the specific procedural instructions for the escrow agent. Power of attorney documentation allows one party to act on behalf of another but is not synonymous with escrow instructions, which focus specifically on the handling of the transaction's funds and documentation.