The Differences Between Title and Escrow


What are The Differences Between Title and Escrow?

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When you buy a home, people are going to say things to you like, “You’ve got to get your check into escrow! Make sure you talk to your Title Officer, and turn in all your documents!”

It can get very confusing, very quickly and what does all that mean anyways?  What’s the difference between title and escrow?

Well the truth of the matter is, title and escrow are in the same building and in fact are usually the same company.  Essentially, both title and escrow are types of insurance.  Title insurance, is a policy that covers the property and any liens that may be held upon it.  For example, let’s say that the previous owner of the home you just bought had a new roof installed, before your purchase.  Now, let’s say that the previous owner neglected to pay for the work and you get a visit from the roofing contractor looking to get paid.  In this scenario, the title company would pay the outstanding debt.  Title insurance is absolutely necessary when purchasing property, because you never know what kind of liens may be held on a property.


Title insurance is absolutely necessary when purchasing property


As for escrow, this is basically a set of instructions and agreements as outlined in the sales agreement.  Remember, a sales agreement is the same thing as an offer.  When you write an offer, you’re also writing the sales agreement.  Here in Oregon, the sales agreement is roughly eleven pages long and the escrow company will look through that paperwork and follow the instructions verbatim.  Whatever it says on that agreement, is exactly what the escrow company will do.  Essentially, the escrow company acts as the middle man between the seller, the buyer, and the lender to make sure that all the money in the transaction goes into the right pockets.

It’s extremely important that you have an amazing Real Estate broker that can either point you to the right title and escrow company or can help you navigate the buying and selling process.

If you have any questions about title and escrow, please feel free to reach out to me and my team.  We’re always here to help you out with anything you may need regarding buying or selling Real Estate.

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