Escrow CompanyTitle Company April 30, 2023

Escrow Company vs Title Company

Escrow Company vs Title Company: What’s the Difference?

When you’re buying a home, there are a lot of things to keep track of. One of the most important is understanding the difference between title insurance company and escrow company. These two services are essential parts of the home buying process, but they serve different functions.

Escrow Company

Escrow companies are responsible for holding and managing the funds and documents involved in a real estate transaction. This includes the buyer’s down payment, the seller’s proceeds, and any other related paperwork. The escrow company will also coordinate the closing of the sale and ensure that all of the necessary documents are signed and delivered.

Title Insurance Company

Title insurance is a type of insurance that protects the buyer and lender against any financial losses that may occur if there are any problems with the title to the property. The title company will conduct a title search to make sure that the seller is the rightful owner of the property and that there are no liens or other encumbrances on the title. If any problems are found, the title company will work to resolve them before the closing can take place.

Comparison Table

Feature Escrow Company Title Insurance Company
Function Holds and manages funds and documents. Protects the buyer and lender against financial losses.
 

Services Provided

Escrow account, closing coordination. Title search, title insurance policy.
Typical Cost Varies, typically paid by the buyer and seller.  

One-time fee, paid by buyer to protect the lender, when financing is involved. Seller pays to protect the buyer.