Independent Escrow Company: What It Means and Why It Matters
An independent escrow company is a business whose only job is escrow. It is not owned by the real estate brokerage, lender, or builder in your deal, so it acts as a true neutral third party between buyer and seller.
How independent escrow companies are regulated
- Licensed by the California Department of Financial Protection and Innovation (DFPI) under the California Escrow Law (Financial Code §17000 and following)
- Examined by the DFPI
- Files an independent annual audit with the DFPI
- Required member of the Escrow Agents' Fidelity Corporation (EAFC), which protects escrow trust funds against losses from theft or embezzlement
- Client funds are held in a separate escrow trust account
Independent escrow vs. title company and broker escrow
Independent escrow company
Licensed and examined by the DFPI under the California Escrow Law; can handle any transaction; escrow is its only business.
Title company escrow
An escrow department of a title insurer, regulated by the California Department of Insurance.
Broker escrow
A real estate brokerage acting as escrow holder, under its DRE license, only for transactions it is part of.
Why choose an independent escrow company
Neutrality
Not owned by the brokerage, lender, or builder in your deal.
Escrow specialists
Escrow is the company's only business.
Accountability
A DFPI license you can verify, and EAFC protection.
Service
One escrow officer from open to close.
Independent escrow by area
Orange County: Orange County · Irvine · Newport Beach · Costa Mesa · Tustin · Santa Ana · Anaheim · Huntington Beach · Mission Viejo · Lake Forest
Los Angeles County: Los Angeles · Long Beach
Inland Empire: Riverside · Corona · Temecula
San Diego County: San Diego
Questions about fees? Escrow fees in California
Independent escrow FAQ
Is an independent escrow company safe?
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Independent escrow companies in California are licensed and examined by the DFPI, file annual audits, and must belong to the Escrow Agents' Fidelity Corporation, which protects trust funds against theft or embezzlement losses. Always verify the license on the DFPI website.
Can I use an independent escrow company if my agent recommends another one?
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Yes. Buyer and seller choose the escrow company together in the purchase agreement, and you can propose any licensed escrow company.
Is Cloud Escrow independent?
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Yes. Cloud Escrow Inc. is an independent escrow company licensed by the DFPI (#96DBO-80565) and is not owned by a brokerage, lender, or builder.