Title vs. Escrow – Educating Clients

The title industry has been an indispensable element of American real estate for ages. The professionals who make up the industry include title and escrow agents along with attorneys and title underwrites depending on different states. In the end, they are all responsible for guaranteeing a secure exchange and ownership of properties in every state. Before diving into the details, let us quickly define what the two terms mean and how agents help you with the services in Texas.

Escrow

Escrow refers to the transactional arrangements managed by the title company as an intermediary for buyer and seller. It is the process of handling everyone’s money until the transaction’s completion, the first encounter usually being the buyer’s earnest money. Think, middleman holding the bet. When you send in earnest money to a title company, you are asking them to hold in trust, until closing or in the unlikely event that you choose not to proceed with the transaction. But that’s not all. A title company will collect all funds from buyers, lenders, your grandma or whomever is contributing to the transaction. Then, the title company will verify who gets paid and how much and pay them. Then everyone gets to hear those magically words, “We’ve Funded!”