Title vs. Escrow: What's the Difference?
Reviewed by Matt Goeglein & Xavier de la Piedra IV — Fidelity National Title
Title and escrow are two different functions. The title company researches ownership, issues the preliminary title report, clears recorded issues, and provides title insurance that protects the buyer and lender from title defects. Escrow is the neutral third party that holds the buyer's funds and the seller's signed documents, follows the mutual instructions in the purchase agreement, coordinates with the lender, and disburses funds at close. In California they're often handled by the same company but they're not the same job.
Title and escrow are the two services that, together, make a California real estate closing possible. They're easy to confuse because the same parent company often provides both, but they do very different work and protect different parties.
The title company researches the property's chain of ownership in the public records, identifies any liens, judgments, easements, CC&Rs, or other matters of record that affect the property, and issues the preliminary title report. After escrow closes and the deed records, the title company issues the actual title insurance policies — an owner's policy that protects the buyer and a lender's policy that protects the mortgage lender — against losses from title defects that existed before closing but were not disclosed.
Escrow is a separate function. Escrow is a neutral third party that holds the buyer's earnest money, down payment, and loan proceeds, and the seller's signed deed and other documents, until both sides have met every condition in the purchase agreement. Escrow follows the mutual written instructions of the buyer and seller, coordinates the loan closing with the lender, prepares the settlement statement, orders the demand and reconveyance from the seller's lender, gathers signed documents, and on the day of recording disburses funds to the seller, the seller's lender, the agents, the title company, and any other party owed money.
In Los Angeles County, title and escrow are typically handled by the same company — Fidelity National Title, for example, provides both. That makes coordination smoother: the title officer and escrow officer can pick up the phone and resolve issues without a third-party handoff. But escrow can also be handled by an independent escrow company that is not affiliated with the title company. Either structure is legal in California.
On a typical purchase, the buyer pays escrow fees roughly split with the seller (the exact split varies by city and contract), the seller pays for the owner's title insurance policy, and the buyer pays for the lender's title insurance policy when financing is involved. Both parties pay for the recording and the county documentary transfer tax according to the customary split in the city where the property sits.
Team Goeglein at Fidelity National Title handles the title side — opening the order, pulling the prelim, clearing the exceptions, walking the parties through what the report says — and coordinates daily with Fidelity's escrow officers (or any independent escrow chosen by the parties) so the file closes on time. Matt Goeglein and Xavier de la Piedra IV personally manage every South Bay and Westside LA file, so questions about either side of the closing get a direct answer from a senior rep.
Frequently asked questions
Is title and escrow the same thing?+
No. Title is the research, insurance, and ownership-record side of a closing; escrow is the neutral third-party holding of funds and documents and the coordination of the close. The same parent company often provides both, but they are separate functions performed by separate people.
Who picks the title and escrow company in California?+
It's negotiable in the purchase agreement. In Southern California it's common for the buyer to choose title and the seller to choose escrow, but in practice the listing agent often suggests both and the buyer's side agrees. Per RESPA, sellers of homes financed with federally related mortgages cannot require the buyer to use a specific title insurer.
Can I use a different escrow company than the title company?+
Yes. Buyers and sellers can use an independent escrow company that is not affiliated with the title company. Both arrangements are legal in California. The title company will still issue the prelim and the policies regardless of where escrow sits.
Do I need both title and escrow on a refinance?+
Yes, but the work is lighter. The title company issues a new lender's policy for the new loan, and a sub-escrow or refinance-escrow function handles the payoff of the existing loan and the funding of the new one. There's no buyer or seller to negotiate around.
Who handles title and escrow in the South Bay and Westside LA?+
Team Goeglein — Matt Goeglein and Xavier de la Piedra IV at Fidelity National Title — handles the title side for South Bay and Westside LA transactions and coordinates daily with Fidelity escrow officers and independent escrow companies across Los Angeles County.
Need a title rep in your city? Call Matt Goeglein at 310-293-0784 or Xavier de la Piedra IV at 562-217-9933. See the full FAQ.