Escrow? Title? What’s the difference.

Many of my clients seem to be confused as to the difference between an Escrow company and a Title company. Small wonder as many companies combine these services. If one looks closely at the name of the company that is handling ones closing, it usually says “Title and Escrow.

Simply put, an escrow company handles the paperwork of the transaction whereas the title company researches the title of a property to determine if title insurance can be offered.

In many states attorneys handle the transactions. In Nevada we use Escrow companies. This does NOT mean you can”t have an attorney represent you, it is just an efficient way to streamline the transaction. An oeverview of this process is:

When an offer is accepted, the agent contacts an escrow company to “open escrow”.  A copy of the accepted offer is sent to an escrow officer along with the buyers earnest money deposit. The escrow officer reviews the offer and creates escrow instructions. These instructions are what the escrow company sees as it”s role in the transaction and are sent to the buyer and seller via their agents to verify accuracy of the details.  

The escrow officer will order a preliminary title search on the property. The title company researches the history of the property detailing any liens. Then they will issue a preliminary report stating whether they will issue title insurance or not. This insures the borrower against claims of liens against the property. Different levels of insurance are often available. Some will insure against encroachment on property boundaries for example.

Escorow will order any payoffs existing on the property. When the buyer brings in closing funds, the escrow officer makes sure the minies are paid out correctly. They put any new liens on the property and record all with the county

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