Title Company vs. Escrow Company: What's the Difference?
Title and escrow are two different jobs on the same sale. Here's what each one does, who oversees it in California, and how they work together.
Last updated November 2026
The short answer
The title company makes sure the title is clear and insures it. The escrow company holds the money and documents and closes the deal.
Side-by-side comparison
| Title company | Escrow company | |
|---|---|---|
| What it does | Searches the public record, issues the preliminary title report and the title insurance policies, and records documents. | Neutral holder of money and documents. Prepares instructions and the closing statement, and disburses funds. |
| Who regulates it | Title insurers and underwritten title companies are overseen by the California Department of Insurance. | Independent escrow companies are licensed and examined by the DFPI under the Escrow Law (Financial Code Division 6, §17000 and following). |
| What it charges | Title insurance premiums, which insurers file with the California Insurance Commissioner. Premiums vary by insurer and price. | An escrow fee set by each escrow company. |
| Who usually pays in Southern California | Seller pays the owner's policy; buyer pays the lender's policy. | Escrow fee split between buyer and seller (with Cloud Escrow the seller's escrow fee is $0. Other closing costs and service fees may apply.). |
Sources: DFPI – About the Escrow Law · California Department of Insurance title insurance guide · Chicago Title 2026 guide
How they work together on one sale
The title company searches the record and issues the preliminary title report. The escrow company prepares instructions, collects the money and signed documents, and prepares the closing statement.
When everything is ready, the title company records the documents and issues the policies. The escrow company then disburses the funds.
Southern vs. Northern California
The California DRE's consumer pamphlet says that in Northern California most escrows are handled by title companies. In Southern California there's usually a separate escrow company and title company (DRE – escrow information for consumers).
Do you need both?
Every sale needs title work and escrow. In Southern California those usually come from two companies, each doing its own part.
Banks, trust companies, insurance companies (including title insurers), certain attorneys and brokers in their own transactions are exempt from the escrow license. That's why a title company can also handle escrow.
How escrow is chosen
The buyer and seller agree on which escrow company handles the sale in the purchase contract.
Title and escrow FAQ
What's the difference between a title company and an escrow company?
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A title company searches the public record, issues the preliminary title report and title insurance policies, and records documents. An escrow company is the neutral holder of money and documents; it prepares instructions and the closing statement and disburses funds.
Who regulates escrow companies in California?
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Independent escrow companies are licensed and examined by the DFPI under the Escrow Law. Title insurers and underwritten title companies are overseen by the California Department of Insurance.
Do I need both a title company and an escrow company?
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A sale needs both title work and escrow. In Southern California there's usually a separate escrow company and title company; in Northern California most escrows are handled by title companies.
Who chooses the escrow company?
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The buyer and seller agree on the escrow company in the purchase contract.
Ready to open escrow?
This guide is general information, not legal or tax advice. Customs vary by county, and every cost is negotiable in your purchase agreement.