Do You Have to Use Your Realtor’s Escrow Company? Here’s What Buyers and Sellers Should Know
When you’re buying or selling a home, there are a lot of decisions that feel out of your hands—especially if you’re relying on a real estate agent to guide the process. One of the most commonly misunderstood pieces of the transaction is the choice of escrow company. Many buyers and sellers assume they have to use the escrow agent their realtor suggests, but that’s simply not the case.
At Neighborhood Escrow, we believe in empowering buyers, sellers, and lenders with transparent information. Let’s take a closer look at who really gets to choose the escrow company—and why that decision matters more than you might think.
Who Actually Chooses the Escrow Agent?
The short answer is: everyone involved in the transaction has a say.
In California, the escrow agent is typically agreed upon by the buyer, the seller, and the lender. While one party may make the initial recommendation—often the buyer’s or seller’s real estate agent—this recommendation is not binding. All parties must agree to the selected escrow provider.
If there’s disagreement, it can become part of the negotiation process, just like price or repairs.
Why Does the Real Estate Agent Make the First Suggestion?
Because agents are the ones driving the early stages of the transaction, they often suggest escrow companies they’ve worked with in the past. This can be a good thing: agents want to close deals smoothly, and they tend to recommend companies they trust to get the job done.
However, it’s important to remember that you are not required to use the escrow company your agent recommends. You have every right to request a different escrow company, do your own research, or select an agent with whom you feel more comfortable.
Is There a Conflict of Interest?
This is where things get tricky. While it’s common for agents to have escrow companies they prefer, ethical agents and brokers do not receive referral fees from escrow companies—and escrow companies should never offer them. Doing so would violate California’s real estate and financial regulations, which are designed to keep the escrow process impartial.
That’s why it’s important to choose an independent escrow company like Neighborhood Escrow, one that doesn’t have hidden ties to any brokerage and operates solely in the best interest of the transaction.
Why Your Choice of Escrow Company Matters
Escrow isn’t just paperwork—it’s the neutral backbone of your entire transaction. The escrow officer is responsible for:
- Holding deposits and funds in trust
- Managing title and closing documents
- Coordinating between buyer, seller, and lender
- Ensuring all contractual obligations are met before closing
- Protecting both parties by acting as a neutral third party
If your escrow provider is inefficient, disorganized, or inexperienced, it can lead to delays, errors, or even legal issues. On the other hand, a qualified, transparent escrow company helps ensure a smooth and stress-free closing.
Questions to Ask Before Choosing an Escrow Agent
Whether you go with your agent’s recommendation or find your own, it’s worth asking a few key questions:
- Is the company licensed and bonded in California?
- Do they have experience with your type of transaction (residential, commercial, FSBO, etc.)?
- How do they handle communication and document access?
- Are their fees transparent and easy to understand?
- Are they truly independent, or affiliated with a specific brokerage?
You Have a Choice—Make It an Informed One
Choosing your escrow agent isn’t just a formality—it’s one of the most important decisions in your real estate transaction. At Neighborhood Escrow, we’re proud to offer truly independent, experienced escrow services backed by exceptional customer care.
If you’re buying or selling a property and want peace of mind throughout the process, give us a call at 310-378-2456. We’re happy to answer your questions and help you take control of your transaction with confidence.
