Escrow vs. Title: What's the Difference?

While they work hand-in-hand, escrow and title companies have different functions. The title company is responsible for researching the property's history to ensure the seller has the legal right to sell it. They search for any "clouds" on the title, such as liens, easements, or other claims, and then issue a title insurance policy to protect the buyer and lender from those past issues.

The escrow company acts as the neutral third-party that manages the transaction itself. The escrow officer collects the purchase agreement, earnest money, loan documents, and other paperwork. They follow the instructions of the buyer and seller, ensuring all conditions of the contract are met before disbursing funds and transferring the title. In some states, these services are bundled, but in Ohio, they are typically separate entities working together for a secure closing.