do I need an escrow service to buy a home in Florida Do I need an escrow service to buy a home in Florida

Do I Need an Escrow Service to Buy a Home in Florida?

Apr 06 2021

Real estate transactions are crucial for any of the parties involved, whether the buyer is going to live on the property, operate a business from it or further develop it. Hence, the property’s ownership must be indisputable. 

In this article, you will discover why an escrow service is a necessary tool during the purchase of a home in Florida. 

Title and Escrow – Understanding the Definition 

Anyone buying or selling a property in Florida certainly came across terms such as “title search” and “title and escrow”, especially during the closing. 

A title is a legal document that contains all the property’s essentials, including the characteristics of the property and who has the ownership rights of it. 

On the other hand, the term “escrow” refers to a proceeding in which a neutral party holds on to funds during a real estate transaction. This way, both the buyer and seller are protected during the process. 

Title Company vs Escrow Company in Florida – What is the Difference? 

Even though both terms are often used interchangeably, they do not necessarily mean the same thing. 

Typically, the role of a title company is to ensure the title of a property is legitimate, which also includes proceeding with a title search to find undisclosed heirs, liens, and other problems.

Once a property title is considered legitimate, a title company will issue title insurance to protect the parties involved in the transaction, especially the buyer and any lender(s) involved. 

On the other hand, an escrow company is a neutral third-party that will hold the money during the transaction, as well as all the essential documents associated with its closing. Plus, they double-check every detail in the process to ensure a smooth closing process.

There are companies in Florida that provide both types of services, which makes property transactions much more streamlined and rapid for everyone involved. 

What Happens if the Buyer and Seller Choose Different Escrow Companies?


Commonly, both parties involved in a real estate transaction can choose distinct escrow companies but end up using only one. In many cases, what differs is the title company – which is referred to as a “spit closing.”

The term “spit closing” refers to a situation in which two distinct title companies are responsible for issuing title insurance policies. 

As provided by the Section 9 of the Real Estate Settlement and Procedures Act:

  • “No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.”

However, every rule has its exception. In case the seller pays for the owner’s and lender’s title insurance, then he/she is allowed to use the title company of choice, and vice-versa. 

What Are the Advantages of Choosing a Company that Provides Both Services at the Same Time? 

Working with two distinct title and escrow companies at the same time is a challenging task. When there are too many people involved, controlling all the factors to ensure a smooth closing gets complicated. 

Working with a title and escrow company will ensure that all individuals involved will follow the same timeline and work to achieve the same goals. Hence, all parties involved will benefit from a streamlined, organized, and secure process executed on schedule. 

Title and Escrow Service in Florida – Why Would I Need It? 

Buying or selling a property in the Sunshine State may seem easy at first glance, but the process involves plenty of time-demanding tasks. During a property transaction in Florida, there are various requirements to be met, which includes:

  • Overseeing the loan process (if there is a mortgage involved);
  • Ensuring all necessary property inspections are done;
  • Negotiating a fair property price to satisfy both parties involved (buyer/seller);
  • Proceeding a title search; and
  • Ensuring the buyer(s)/lender(s) involved in the transaction have insurance.

It is worth noticing that it is not required to use a title and escrow companies by Florida law. Nonetheless, relying on the expertise of an escrow service is the best way to handle real estate transactions. 

A title and escrow company will offer a team of seasoned professionals that will guide the process, especially when things do not go as expected. In most cases, an escrow service is necessary to ensure a successful outcome.

Do Not Waste Time with Uncertainty When Buying a Property in Florida 

At Marina Title, we will ensure that everything will be in place on the day of closing. Call us today at (305) 901-5628 or email us at

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