Escrow and Title: What to Expect When Buying a Home

Buying a home comes with plenty of paperwork—and a few terms you may not use every day. Two you’ll hear often are escrow and title.

After more than 35 years in real estate, I know how much easier the process feels when you understand what’s happening and why. My approach is straightforward: explain the details, stay ahead of potential problems, and keep your goals at the center of the transaction.

Here in Northern California, title and escrow are typically handled together through the same title company. They serve different purposes, but your local title and escrow team coordinates both parts of the closing process.

What Is Escrow?

Once you have an accepted purchase agreement, you’ll often hear, “We’ve opened escrow.”

Escrow is the neutral part of the transaction that holds funds and documents and follows the written instructions needed to complete the sale. The escrow officer works with the buyer, seller, agents, and lender to coordinate closing.

Think of escrow as the central point for the paperwork and money involved in transferring the property.

What Does Your Escrow Officer Handle?

Your escrow officer helps coordinate several important steps:

• Receives your deposit. Your earnest money deposit is held in escrow and generally credited toward your down payment and closing costs when the purchase closes.
• Coordinates closing paperwork. This includes escrow instructions, payoff information, lender documents, and documents needed to transfer ownership.
• Prepares financial statements. These show the purchase price, credits, charges, and funds needed to close.
• Receives and distributes funds. Escrow handles the buyer’s funds and loan proceeds, pays authorized expenses and existing liens, and distributes the seller’s proceeds.
• Arranges recording. When closing requirements are met, the appropriate documents are submitted to the county recorder.

Escrow follows the written instructions for the transaction. Your agent helps you manage inspections, contingency decisions, negotiations, and contract deadlines. Those responsibilities work together to keep the purchase moving.

What Is Title?

Title refers to ownership of the property and the rights that come with it.

The title company reviews public records to identify recorded ownership interests, liens, easements, and other matters that could affect your purchase. You’ll typically receive a preliminary title report showing the conditions and exceptions under which the company is prepared to issue title insurance.

This is a document worth reviewing carefully. The goal is to understand what you’re buying and what needs attention before closing.

What Might Show Up in a Title Review?

Some items are routine. Others take additional work to resolve. Examples include:

• Existing loans or liens that need to be paid through closing.
• Ownership questions, including missing signatures, trust documentation, or estate matters.
• Easements, such as rights allowing utility companies or neighbors to use a portion of the property.
• Recorded restrictions that may affect how the property can be used.
• Legal description discrepancies that require further review.

An easement or restriction does not automatically mean something is wrong. It does mean you should understand how it affects your plans. A title review also does not replace a survey or confirm every physical boundary.

My job is to help you recognize questions early and get answers from the right people.

What Does Title Insurance Cover?

A title search helps identify recorded issues before closing. Title insurance provides protection against certain covered title problems, including some that may not be discovered during that search.

There are two main types:

• Lender’s title insurance protects the lender’s interest in the property and is generally required when financing a purchase.
• Owner’s title insurance protects the buyer’s ownership interest, subject to the policy’s coverage, exclusions, and limits.

A lender’s policy does not protect your equity. That is why it’s important to understand the owner’s policy being offered and ask the title company to explain its coverage.

A Few Terms Worth Knowing

Earnest money deposit: Your initial good-faith deposit toward the purchase. If the transaction closes, it is generally applied toward the funds you owe. If the purchase is canceled, how the deposit is handled depends on the contract and circumstances.

Contingencies: Conditions in the purchase agreement addressing matters such as inspections, financing, and appraisal. These involve deadlines and decisions that deserve careful attention before you remove a contingency in writing.

Closing Disclosure: For most financed purchases, this lender-provided document outlines your final loan terms, payment, and closing costs.

Settlement statement: An accounting of the transaction’s charges, credits, and funds received or paid out.

Impound account: An account your mortgage servicer may use to collect and pay property taxes and homeowners insurance. This is separate from the escrow used to complete your purchase.

What If You’re Using FHA Financing?

The basic title and escrow process is similar, but FHA financing adds loan and property requirements that can affect the timing of closing.

The appraisal, any required repairs, and the lender’s final approval all need attention. Your lender explains the loan requirements, while your agent and title and escrow team help coordinate the steps needed to close.

The practical point: signing paperwork is one step in the process. Funding, recording, and possession still need to be coordinated according to your agreement.

Questions I Encourage Buyers to Ask

You should feel comfortable asking questions throughout your purchase, including:

• Who is my escrow officer, and how will I receive updates?
• What deadlines or decisions are coming up next?
• Are there title items that need further review or resolution?
• How much money will I need to close, and when is it due?
• Will my mortgage payment include taxes and insurance?
• When will closing be confirmed, and when can I receive the keys?

*Before sending closing funds, verify wiring instructions directly with your escrow officer using a trusted phone number.

Clear Guidance From Contract to Closing

You don’t need to become an expert in title and escrow to buy a home. You do deserve clear explanations, timely communication, and someone helping you stay ahead of the details.

Whether you’re buying or selling in Chico, Oroville, Paradise, Gridley, Biggs, or the surrounding Butte County communities, I’ll help you understand your options and make informed decisions based on your goals.

Julie Miller Real Estate
Experience Pays.
Straight Talk. Strategic Marketing. Stronger Results.
Call or text: (530) 433-5607