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News > What's the Difference Between Title and Escrow?

Title vs Escrow

You may have heard the terms "title" and "escrow" thrown about like you should know what they mean. If you're a new home buyer, don't worry - you're not alone if they seem like vague concepts. So what's a title and what's escrow?

TITLE: The legal right to own something. In this case, it's a piece of property, like a condo, townhome, single family property, or land. When you buy a property, one of the steps is to get the title changed from the seller to you. For example, you might be asked "How do you want to take title?" which just means how you want to own the property which could be community property, sole ownership or other choices we won't go into here.

ESCROW: Is an arrangement where a third party will hold funds and execute certain activities on behalf of both parties to a contract. A company that acts as this third party is usually referred to as an Escrow Company and the person within that company working on the transaction is called a "Escrow Officer."

Often in Arizona, one company may handle the escrow and the title.


Once a purchase contract has been signed by the buyer and seller, your real estate agent will send the contract to the escrow officer, who will "open" escrow. Now it's time for the title officer to do their work. The title officer will research past property ownership, looking for any problems, like a lien on the property, a break in the chain of title (meaning someone took title to the property improperly), and incorrect legal descriptions. Finding a lien (which is a claim on the property) on a property is common - a lender will put a lien on a property if they issue a mortgage. Other, more serious title issues are rare. Once all this research is complete, the title officer can issue a "Title Commitment", which is a commitment to insure the title when the property changes hands.

In the meantime, the escrow officer will get busy with some other tasks, like:

  • Issuing a receipt for the earnest deposit the buyer contributes.
  • Creating the settlement statement, which is an accounting of what the buyer pays for, what the seller pays for and receives, and what third parties (like mortgage companies and the county for property taxes) receive.
  • Ordering the Homeowner Association package and sending to the buyer.
  • Creating the paperwork needed to record the change of ownership in the county records.
  • Getting all the paperwork (which may include lender documents) ready for both parties to sign
  • And finally, recording the new ownership (called the deed) with the county and paying all the parties due funds from the transaction.


The escrow officer will communicate with you directly regarding paperwork you need to sign, money that needs to be transferred, and other items.

NOTE: Never wire money to a destination you receive in an email because banking fraud is unfortunately becoming more common. Call your escrow officer at a trusted number to obtain or verify wire instructions.

If this seems confusing, and it can for new home buyers, call your real estate agent with questions. We're here to help our buyers have as smooth and hiccup free a transaction as possible.

Ready to get started with your home search? Contact our team to be represented by an experienced real estate agent that will advocate for you.


Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

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Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.

Last Updated: 2024-06-14 04:35:19