Title and Escrow Guide
What title and escrow companies do, what TCs send them, and how to keep closings on track. Field guide for transaction coordinators.
Title and escrow companies are the operational backbone of every real estate closing. They confirm clear title, hold the buyer's funds, coordinate documents, and disburse everything at closing — including commissions per the broker's CDA.
For transaction coordinators, this guide covers what title and escrow actually do, what you need to send them, and the closing-day issues that derail deals.
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What Title Companies Do
Four core functions in every transaction.
Title Search
Examines public records to confirm the seller has the legal right to transfer ownership. Identifies liens, easements, judgments, and any clouds on title that need to be cleared before closing.
Title Insurance
Two policies: owner's policy (protects the buyer's ownership claim) and lender's policy (protects the lender). Covers issues that surface after closing — undisclosed heirs, fraud, errors in public records.
Title Commitment
A written promise to issue title insurance once stated requirements are met. Lists exceptions (things not covered) and conditions (items that must be cleared). TCs review for any items that could delay closing.
Closing & Disbursement
In title-state closings, the title company conducts the closing meeting (or facilitates remote closing), records the deed and mortgage, and disburses funds per the closing statement and the broker's CDA.
What Escrow Agents Do
Escrow is the neutral third party that holds funds and coordinates closing.
Holding Earnest Money
Receives the buyer's earnest money deposit and holds it in a neutral trust account until closing. Cannot release funds to either party without mutual agreement or a court order.
Coordinating Documents
Collects everything that must be signed at or before closing — deed, deed of trust, closing disclosure, payoff statements, lien releases. Holds in escrow until conditions are met.
Disbursing Funds at Closing
Once closing conditions are met, escrow agent wires loan funds to the seller's payoff lender, sends seller proceeds, pays commissions per the broker's CDA, and pays third-party fees (taxes, recording, title insurance).
Recording the Transaction
Sends the executed deed and mortgage to the county recorder for public recording. Once recorded, the buyer's ownership is officially established and the loan is officially secured.
State Variation
How title and escrow work depends on whether you're in a title-company state or an attorney state.
Title-Company States
Most states. The title company (or escrow company) handles the closing — coordinating documents, holding funds, recording the transaction. Examples: California, Texas, Florida, Arizona, Washington.
Attorney States
Closing is conducted by a real estate attorney. The attorney does much of what a title company would do in other states — holding funds, drafting/reviewing documents, recording. Examples: New York, Massachusetts, Connecticut, Georgia, South Carolina, parts of Delaware and New Jersey.
Hybrid / Partial Attorney States
Some states (like North Carolina) require attorney involvement for specific tasks — typically title examination — but allow title companies to handle the closing logistics. Practice varies by region within the state.
For the full state-by-state breakdown, see our attorney vs. title states guide.
What TCs Send to Title and Escrow
Eight standard items the title/escrow team needs from the TC to keep the closing on track.
Fully executed purchase contract + addenda
Title needs the contract to know parties, sale price, closing date, and any contingencies that affect timing.
Earnest money deposit instructions or check
Per the contract, EMD goes into the escrow holder's trust account within the contract's timeframe (often 1–3 business days).
Buyer & seller intake forms
Title needs full legal names, current addresses, marital status, vesting preferences, and SSN/EIN for IRS reporting (1099-S).
Lender contact info
Title coordinates with the buyer's lender for loan documents, payoff statements, and wire instructions.
Existing loan payoff requests (seller side)
Seller's mortgage payoff and any HELOC or second-lien payoffs must be ordered well before closing.
HOA / condo association estoppel requests
For HOA properties, title needs proof of dues paid, transfer fees, and the association's estoppel letter.
Commission Disbursement Authorization (CDA)
Tells title how to disburse commission at closing — to which brokerages, agents, TCs, and referral parties.
Final walkthrough confirmation
Confirmation that buyer is satisfied with property condition is sometimes required before title disburses.
Common Closing-Day Issues
The five most common things that derail closings — and how to prevent each.
Title not cleared by closing day
Closing delays. Common causes: unresolved liens, missing payoff, unresolved heir claims.
Order title commitment within 24 hours of contract acceptance. Review for exceptions/conditions early. Don't assume "clear-to-close" until title says so in writing.
Wire fraud
Buyer wires closing funds to a scammer's account based on a spoofed email. Funds are typically unrecoverable.
Never email wire instructions. Always confirm by phone using a number from a verified source (not from the email). Title companies should use encrypted portals and verbal confirmation.
Missing payoff statement
Seller's lender hasn't sent the payoff figure, so net-to-seller can't be calculated. Closing pushes.
TC orders payoff at least 10 business days before closing. Some lenders take 5+ business days; HELOCs and second liens are often slower.
CDA not delivered or has errors
Title can't disburse commission without a valid CDA. Closing happens but commission disbursement is delayed.
Deliver signed CDA to title at least 2–3 business days before closing. Reconcile against listing agreement and agent comp before the broker signs.
Funds not received by closing time
Buyer's funds (cash to close) didn't hit the escrow account in time, or lender's wire was delayed.
Confirm wire deadline with the title company. Most title companies require funds the day before closing — not closing day morning.
For the full closing-day timeline, see our real estate transaction process guide and closing timeline calculator.
Frequently Asked Questions
What's the difference between a title company and an escrow company?
In some states they're the same entity (e.g., a "title and escrow company" in California). In others, they're separate: the title company examines title and issues insurance; the escrow company holds funds and conducts the closing. Either way, the functions are: (1) confirming clear title, (2) holding earnest money and closing funds, (3) coordinating documents, and (4) disbursing funds and recording the transaction.
What does a title company actually do?
A title company does four main things: (1) searches public records to confirm the seller has clear ownership and identify any liens or clouds on title; (2) issues title insurance to protect the buyer's ownership and the lender's mortgage; (3) issues the title commitment document listing requirements that must be met before closing; and (4) in title-company states, conducts the closing itself — coordinating documents, recording the deed, and disbursing funds.
What does an escrow agent do?
The escrow agent is a neutral third party that holds the earnest money deposit and (later) the buyer's closing funds in a trust account. They cannot release funds to either side except per the contract terms. At closing, the escrow agent disburses everything: loan payoffs, seller proceeds, commissions per the CDA, taxes, recording fees, and title premiums.
Who picks the title or escrow company?
Per the federal Real Estate Settlement Procedures Act (RESPA), the buyer has the right to choose. In practice, who chooses depends on local custom: in many markets, the buyer's agent recommends a preferred provider; in others, the seller picks for the listing side and the buyer picks for the buyer side; some markets default to a single closer for the entire transaction.
What is title insurance and why do you need it?
Title insurance protects against issues with the property's ownership history that surface after closing — undisclosed heirs, forged documents, errors in public records, fraud. There are two policies: an owner's policy (protects the buyer) and a lender's policy (protects the mortgage lender). Lender's policies are required by lenders; owner's policies are optional but strongly recommended. The premium is a one-time payment at closing.
How long does the title and escrow process take?
Once a contract is signed, title commitment typically arrives within 5–10 business days. Title clearance (resolving any exceptions) happens throughout the inspection and contingency periods. Escrow opens at contract acceptance and stays open through closing — typically 30–45 days for financed deals, 7–14 days for cash. Some markets close in as little as 14 days for clean deals.
What does a transaction coordinator do for title and escrow?
The TC is the operational interface between the agent and the title/escrow company. They send the executed contract within hours of acceptance, deliver intake forms and earnest money instructions, route the CDA, order payoff statements, schedule the closing, and chase any title clearance items. The TC's job is to make sure the title/escrow team has everything they need so closing day is uneventful.
What is a title commitment and what should I look for in it?
A title commitment is a written promise by the title company to issue title insurance once stated conditions are met. It has two key sections: (1) Schedule B-I (Requirements) — items that must be cleared before closing, like seller's existing mortgage payoff or release of an old lien; and (2) Schedule B-II (Exceptions) — things title insurance won't cover, like easements or restrictive covenants. TCs review the commitment within 24 hours of receipt and flag any requirements that could delay closing.
How does title and escrow work in attorney states?
In attorney states (e.g., New York, Massachusetts, Connecticut, Georgia, South Carolina), a real estate attorney handles the closing. The attorney often performs many of the same functions a title company would in other states — drafting/reviewing the contract, examining title, holding funds, recording the deed. Title insurance is still issued by a title insurance underwriter, but the closing logistics flow through the attorney's office. See our attorney-vs-title-states guide for the full state breakdown.
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