What First American Title does in escrow

First American Title is a title insurance and settlement services company that holds escrow funds during real estate transactions. When you buy or sell property, First American Title can act as the neutral third party that receives money from the buyer, holds it, and releases it to the seller only after all conditions of the sale are met — inspections pass, financing clears, title is clear, and documents are signed.

The company operates through local title offices across the United States. Each office handles the paperwork specific to your state and county, because escrow rules, title requirements, and closing procedures vary by location. First American Title also issues title insurance policies, which protect you and your lender against claims that someone else owns part or all of the property you are buying.

Escrow with First American Title typically begins when you and the seller sign a purchase agreement. You deposit your earnest money (the good-faith payment showing you are serious about the purchase) into escrow. First American Title then coordinates with your lender, the seller's agent, the title search company, and any inspectors or appraisers involved in the transaction.

Key Takeaways

  • First American Title holds your earnest money and down payment in escrow until all conditions of the sale are satisfied, then releases funds to the appropriate parties.
  • The company issues title insurance policies that protect you against ownership claims and liens discovered after you close, which your lender usually requires.
  • Escrow timelines and procedures depend on your state and county, so the specific steps and costs vary by location.
  • First American Title charges escrow and title insurance fees, which are typically split between buyer and seller according to local custom or the purchase agreement.

How escrow closes and funds are released

First American Title releases escrow funds only when the company has confirmed that all conditions have been met. This means the title search has been completed and shows no liens or ownership disputes, your mortgage lender has approved the loan and sent the final funds, all inspections and appraisals have been done, and both you and the seller have signed the closing documents.

The closing process itself happens at a First American Title office or, in some cases, remotely through electronic signing. You will review and sign the deed (which transfers ownership), the promissory note and mortgage (if you are borrowing), the closing disclosure (which shows all final costs and loan terms), and other state-specific documents. The seller signs the deed and any documents releasing liens or easements.

Once all documents are signed and the title company has received the final loan funds from your lender, First American Title releases the purchase price to the seller's account. Any earnest money you deposited earlier is credited toward your down payment. Remaining costs — property taxes, homeowners insurance, HOA fees, and other prorated amounts — are paid from escrow at closing.

Title insurance and what it covers

First American Title issues two types of title insurance: a lender's policy, which protects your mortgage lender, and an owner's policy, which protects you. Your lender requires the lender's policy as a condition of the loan. The owner's policy is optional but strongly recommended, because it covers you against claims that arise after closing.

Title insurance protects against problems discovered after you own the property — for example, a previous owner's unpaid property taxes, a contractor's lien filed years ago, a forged deed in the chain of ownership, or a boundary dispute with a neighbor. If a claim arises, First American Title pays the legal costs to defend your ownership or pays the claim amount up to the policy limit. The policy remains in effect for as long as you own the property.

The title search that First American Title conducts before closing is designed to find these problems before they become your problem. The search examines public records going back decades to trace the chain of ownership and identify any liens, judgments, or other claims against the property. If problems are found, they must usually be resolved before closing — for example, by paying off a lien or obtaining a release from a creditor.

Costs and who pays them

First American Title charges separate fees for escrow services and title insurance. Escrow fees typically range based on the purchase price and the complexity of the transaction, though the exact amount depends on your state and the specific office. Title insurance premiums are calculated as a percentage of the purchase price and vary by state — some states regulate the rate, while others allow companies to set their own.

The purchase agreement usually specifies who pays which costs. In some states and markets, the seller traditionally pays the title insurance premium and part of the escrow fee. In others, costs are split or the buyer pays more. Your real estate agent or the purchase agreement itself will show you the estimated costs before you commit to the transaction.

First American Title provides a closing disclosure at least three business days before closing, which itemizes all costs and shows exactly what you will pay and receive. This document is required by federal law and gives you time to review the numbers and ask questions before you sign.

How First American Title differs from other title companies

First American Title is one of the largest title insurance companies in the United States, but it is not the only option. Other major companies include Fidelity National Title, Chicago Title, and Stewart Title. All of them perform the same core functions — holding escrow, conducting title searches, issuing title insurance — but they operate through different local offices and may have different fee structures or service options.

Your choice of title company is often made by the seller or the real estate agent, not by you as the buyer. However, you have the right to shop for title insurance and escrow services. If you want to use a different company, you can request it in the purchase agreement, though the seller may refuse or negotiate the cost difference.

First American Title's size means it has offices in most states and can handle complex transactions, but local or regional title companies may offer more personalized service or lower costs in your area. The key is to compare the total cost — escrow fee plus title insurance premium — not just one line item.

What happens if a title problem is found before closing

If the title search uncovers a lien, judgment, or other claim against the property, First American Title notifies all parties and the transaction does not close until the problem is resolved. Common issues include unpaid property taxes, contractor liens from renovation work, or a second mortgage the seller did not disclose.

The seller is responsible for clearing title defects, which usually means paying off the lien or obtaining a written release from the creditor. First American Title coordinates this process and holds the closing until the title company receives proof that the lien has been paid or released. If the seller cannot clear the title, the buyer can walk away from the deal, and the earnest money is returned.

In rare cases, a title defect cannot be cleared before closing — for example, if a previous owner's heir suddenly appears with a claim to the property. In this situation, First American Title may issue a title insurance policy with an exception for that claim, meaning the policy does not cover it. You would then decide whether to proceed with the purchase knowing about the exception.

Electronic closing and remote signing options

First American Title offers electronic closing and remote notarization in many states, which allows you to sign closing documents without visiting an office in person. The process typically involves a video call with a notary, find document signing software, and electronic transfer of funds. This option became more common during the COVID-19 pandemic and is now available in most states, though some states have restrictions on which documents can be signed remotely.

If you use remote closing, you still receive the same closing disclosure and review period, and the title insurance and escrow protections remain the same. The main difference is convenience — you do not have to take time off work or travel to an office. However, some buyers and sellers prefer an in-person closing to ask questions face-to-face and have a final walkthrough of the property before funds are released.

Frequently Asked Questions

Can I choose First American Title, or does the seller decide?

The seller or real estate agent typically selects the title company, but you can request a different company in the purchase agreement. If the seller refuses, you can negotiate the cost difference or walk away. You always have the right to shop for title insurance and escrow services.

What if First American Title finds a problem with the title after I close?

That is what title insurance is for. If a claim arises after closing, you report it to First American Title, and the company pays the legal costs to defend your ownership or pays the claim amount up to the policy limit. The policy remains in effect as long as you own the property.

How long does escrow take from start to closing?

Escrow typically lasts 30 to 45 days from the time you sign the purchase agreement to closing, though it can be shorter or longer depending on financing, inspections, and appraisals. First American Title coordinates the timeline but does not control how fast your lender approves the loan or how quickly inspectors schedule appointments.

Do I get my earnest money back if the deal falls through?

It depends on why the deal falls through. If you back out without a valid reason stated in the purchase agreement, the seller usually keeps the earnest money. If the lender denies your loan, the inspection fails, or the title has a problem the seller cannot fix, your earnest money is returned to you.

Are First American Title's fees negotiable?

Title insurance rates are regulated in some states and set by the company in others, so there is limited room to negotiate the premium. Escrow fees may have more flexibility, especially if you are paying cash or if the transaction is complex. Ask First American Title for a quote and compare it to other companies in your area.