How to Cancel an Escrow Account Without Fees

Buying a new house involves use of an escrow account to hold your funds.

Buying a new house involves use of an escrow account to hold your funds.

Nobody wants to work without pay, and workers managing escrow accounts represent no exception. Still, there are ways to avoid paying a fee for a cancellation of an escrow account. For example, you may arrange for the other party in the escrow transaction to pay the fees. The most important move to escape without large fees is to cancel the escrow as soon as possible. Don't waffle or wait. The longer you procrastinate, the greater the chance that you will end up with an escrow bill.

Select an escrow company or escrow handler -- depending on your state real estate law -- recommended by your real estate agent or broker. This is the most important element in escaping without fees. An escrow officer is more inclined to let fees slide when the person knows your real estate agent or broker. If your agent is a steady customer, the officer knows your agent will return with other clients -- provided the officer works with the agent in this difficult situation.

Talk to your real estate agent or broker as soon as possible about the problems with the real estate transaction. If you want to cancel the escrow because you've changed your mind, you'll need to pay fees. If the escrow cancellation is a result of an emergency situation -- a death in the family, for example -- the cancellation fees typically are waived.

Discuss the problems with your escrow officer as soon as you discover the issue. Even if you let your agent or broker know about the problem, also touch bases with your escrow officer to show you're not a flaky client.

Make a written statement to your escrow officer, if your lender fails to approve your home loan. Escrow companies frequently do not charge a fee for services when the lender doesn't approve the loan. The hope is that you'll apply to other lenders and eventually find a lender to approve your home loan. Ask your escrow officer to hold your escrow for use in your new loan transaction.

Locate a substitute property to purchase or -- if all else fails -- wait for a new buyer for your house to step in for the other partner in the escrow transaction. This saves money by allowing your escrow officer to use much of the same paperwork for the new escrow transaction.


  • Be flexible to possible escrow changes. Much of the early escrow work happens without fanfare in the beginning of the escrow process. Avoid throwing away the work of others without careful consideration to avoid escrow fees and charges. If you're inflexible and act like a nasty curmudgeon, you'll probably end up with charges.


  • Escrow fees apply to the charges made by the escrow company. Your lender and title officer also charge fees for the services related to the real estate transaction. These companies may bill you separately for their services, even when your escrow officer waives the basic escrow office fees.

About the Author

*I have written chapters and articles for Oxford and Harvard University Presses, ABC-CLIO, and others. Arcadia Press published two of my local history texts and I have also written for numerous "article sites," including Pagewise in 2002. My "How to become a...real estate agent" is available as an online text from a Canadian publisher. *I taught writing courses at a branch campus of Indiana University. *I held a California real estate license and have remodeled four of my own homes and advised others on financing homes, repairing credit to qualify for loans, and managing construction (including meeting local, state, and federal regulations for restoration and development grants). *I served as an AmeriCorps*VISTA volunteer and wrote nearly $75,000 in small education grants (under $1,000). *My travels include frequent road trips in Canada, Mexico, U.S., and Europe. I attended school at Cambridge University and used this as a base to explore the UK and Europe.

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