For a For-Sale-By-Owner escrow in which the principals do not have a contract, what is required of the escrow?

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When there is no contract between the buyers and sellers, the escrow’s role is limited to following instructions and acting as a neutral facilitator. A purchase agreement or contract between the parties is what creates binding obligations and authorizes the escrow to move forward. Therefore, in a For-Sale-By-Owner escrow without an existing contract, the escrow should inform the parties that a purchase agreement must be prepared and executed before escrow can proceed. The escrow instruction itself is not the contract, and the escrow officer does not draft or bind the parties to a contract. Once a valid agreement is in place, the escrow can carry out its duties under that contract.