Written By: Vikkki Head
Title… and Escrow.. two words that are certainly related in the real estate industry, however, they are definitely not synonymous, and often times one will be confused with the other.
Let’s break it down, shall we?
A Title Company is a business that helps facilitate and close the deals between parties of a real estate transaction. While the title company does not represent either party they do WORK for them, meaning they prepare title transfer documents and check to make sure the title on the property is free and clear (so that the seller can sell, and the buyer can buy) and they also record the deed at the courthouse.
There are several different meanings for the word escrow. The title company is known as the “escrow agent” because they are the entity that holds and transfers the funds in a real estate transaction. An escrow account is a third-party account where funds are held before they are transferred to the ultimate party.
Title companies have escrow accounts and hold funds like option fees and earnest money and they also transfer money on the sale of a property. This type of escrow account is not to be confused with a mortgage escrow account (although the name is the same). A mortgage escrow account is where your lender will hold money from your monthly payments to pay your taxes and insurance on a loan.
All of that seems confusing, and it can be. That is why you need a real estate professional who knows what they are doing and can give you the best advice and opinions when it comes to navigating the home-buying and selling processes. Give us a call today at 325-691-1410