Either the buyer or the seller can select the escrow company. No federal law assigns the choice to one side, so it usually comes down to local custom, whoever is paying the escrow fee, and what the two parties write into the purchase agreement. Federal law does draw one hard line: a seller cannot force a buyer to use a specific title insurance provider. Beyond that, the pick is negotiable, and you have the right to shop.
How the Choice Usually Gets Made
Custom varies by region more than most buyers and sellers realize. In many West Coast markets, the buyer traditionally selects the escrow company. In parts of the South and Midwest, the seller or the seller’s agent often makes the pick. In plenty of markets there is no dominant custom, and the selection becomes a negotiation point like price or closing date.
A practical rule: whoever is paying the escrow fee has the strongest claim to choosing the provider. If the seller is covering escrow costs, the seller’s agent will suggest a company. If the buyer is paying, the buyer’s agent typically recommends one. When fees are split, both sides have a say, and the purchase contract needs to name a company both parties accept.
Agents on both sides almost always have a preferred escrow company they have worked with before. Those recommendations carry weight because agents know which companies communicate well, meet deadlines, and handle problems without drama. They are not binding. You can propose a different company, and no agent can require you to use a particular provider.
Your Right to Shop
If you are financing the purchase, your lender must give you a Loan Estimate that includes a list of closing service providers you can shop for. Escrow and title services typically fall in the “services you can shop for” category. You can use a provider not on the lender’s list, as long as the lender agrees to work with that company.1Consumer Financial Protection Bureau. What Required Mortgage Closing Services Can I Shop For?
If a recommended company’s quote looks high, get a second or third estimate. The federal disclosure process was built to encourage that comparison.
What the Seller Cannot Do
The Real Estate Settlement Procedures Act (RESPA) sets several protections that shape who really gets to pick. They apply to any transaction involving a federally related mortgage loan, which covers most home purchases.
No Forcing a Title Insurance Provider
A seller cannot require, directly or indirectly, that you buy title insurance from a specific company as a condition of the sale. If a seller violates this rule, they are liable to the buyer for three times the title insurance charges.2Office of the Law Revision Counsel. 12 USC 2608 – Title Companies; Liability of Seller A seller can suggest a company or express a preference. They cannot make the sale contingent on you using their pick.
No Kickbacks for Steering You Somewhere
Nobody involved in your transaction is allowed to receive a kickback or referral fee for pushing you toward a particular settlement service provider. Your agent cannot accept a secret payment from an escrow company for sending business, and no one can split fees for work they did not actually perform. Violations carry penalties of up to $10,000 in fines and up to a year in prison, and anyone who pays or receives an illegal kickback is jointly liable to you for three times the settlement service charge involved.3Office of the Law Revision Counsel. 12 USC 2607 – Prohibition Against Kickbacks and Unearned Fees
Affiliated Companies Must Disclose
There is one important exception to the kickback rule. Real estate brokerages, lenders, and title companies are allowed to own or hold financial interests in each other through what is called an affiliated business arrangement. Your agent’s brokerage might own the title company they are recommending. That is legal, but only if the person referring you provides a written disclosure explaining the ownership or financial relationship and gives you an estimated range of charges. The disclosure must come on a separate piece of paper at or before the time of the referral, and no one can require you to use the affiliated provider.4Consumer Financial Protection Bureau. 12 CFR 1024.15 – Affiliated Business Arrangements
If an agent hands you an affiliated business disclosure, that is a compliance signal, not a mandate. Read it, understand who profits from the referral, and then decide whether to use that company or price out others.
When an Attorney Handles Closing Instead
In roughly a dozen states, primarily in the Northeast and parts of the Southeast, an attorney must handle the closing or at least prepare key legal documents. Connecticut, Georgia, Massachusetts, South Carolina, and New York fall into this group. In those markets the question is which attorney oversees the process, not which escrow company to pick. Several other states require attorney involvement for specific tasks like title examination or deed preparation without requiring an attorney to run the whole closing. If you are buying in an unfamiliar state, ask your agent early whether an attorney is customary or required.
Terminology can also blur the picture. Many title companies also offer escrow services, so the same company often handles both functions, and whether you hear “escrow company” or “title company” depends on the region.
How to Evaluate the Company You’re Offered
The cheapest option is not automatically the best one. A poorly run escrow can delay closing by weeks, and in a tight market that delay can cost the deal. A few things to check before you agree:
- How long the company has handled closings in your area and how many transactions it processes each month.
- Who your point of contact will be, and whether that person returns calls the same day. Some companies assign a dedicated escrow officer; others rotate staff.
- A written fee estimate upfront, with add-ons like wire fees, courier fees, and document preparation fees spelled out rather than tacked on later.
- Online portals for document tracking and electronic signatures, which cut down on lost paperwork and delays.
- Proper state licensing and errors-and-omissions insurance, which protect you if something goes wrong.
If the recommended company checks these boxes and pricing is competitive, there is usually no reason to fight the choice. Push back when the recommendation comes with an affiliated business disclosure and the fees run noticeably above competitors, because at that point the referral may be driven more by the financial relationship than by service quality.
What Escrow Costs and Who Pays
Escrow fees for a standard residential transaction generally run from a few hundred dollars to over a thousand, depending on purchase price, complexity, and location. Some companies charge a flat fee; others calculate a percentage of the sale price. The fee appears on your Closing Disclosure before the transaction finalizes, so if you have reviewed your Loan Estimate carefully there should be no surprises at the table.
Who pays is negotiable. Some markets split the fee evenly; in others, one side customarily covers the full amount. Sellers sometimes agree to pay escrow as a concession to attract buyers. Whatever the arrangement, it belongs in the purchase agreement. If the contract is silent, expect a conversation before closing.
After the Choice Is Made
Once both parties agree, the escrow company gets named in the purchase agreement and escrow opens. The buyer’s earnest money deposit is typically due within three business days of the contract being accepted, and the escrow company sets up the account to receive it.5Investopedia. Earnest Money: Definition and How It Works in Real Estate
From there, the escrow officer prepares instructions based on the purchase agreement and tracks each condition that must be satisfied before closing: loan approval, inspection, title search, and any repairs or credits the parties negotiated. Once every condition is met, funds are disbursed, the deed is recorded, and the property changes hands.