Learn About First American Title and Escrow

What First American Title and Escrow Does

First American Title and Escrow is one of the largest title insurance and escrow service companies operating in the United States. The company has been in business since 1889, making it one of the oldest continuously operating title companies in America. First American operates through thousands of offices across all 50 states, serving millions of real estate transactions each year. Understanding what this company does requires knowing the roles that title companies and escrow services play in property transactions.

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Title companies like First American search public records to verify property ownership and identify any issues that might affect the sale or transfer of real estate. An escrow service is a neutral third party that holds funds and documents during a real estate transaction, releasing them only when all conditions of the sale have been met. These two functions often work together in real estate deals, though they address different needs in the transaction process.

First American Title operates in a regulated industry. State insurance departments oversee title insurance companies, and real estate commissions regulate escrow services. The company must follow state-specific rules about how it handles customer funds, maintains records, and discloses information about transactions. This regulatory framework exists to protect consumers and ensure that large amounts of money and important property documents are managed safely.

The company generates revenue through title insurance premiums and escrow fees. Title insurance is a one-time payment that protects a property owner or lender against financial loss if someone later claims ownership rights to the property. Escrow fees are typically based on the transaction amount and are split between the buyer and seller or negotiated as part of the sale agreement.

Practical Takeaway: First American Title and Escrow handles two distinct but related services in real estate: verifying property ownership through title searches and holding money and documents as a neutral party during transactions. Knowing this distinction helps buyers and sellers understand what to expect from their interactions with the company.

How Title Searches and Title Insurance Work

When you buy a house or commercial property, you need to know that the seller actually owns what they are selling and that no one else has a legitimate claim to the property. This is where a title search comes in. Title professionals at First American examine public records at the county courthouse, property tax assessor's office, and other government agencies to trace the history of property ownership. They look for deeds, mortgages, liens, judgments, and other documents that may affect the property.

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A title search typically goes back many years—sometimes decades. The search aims to answer questions like: Has the current owner owned the property long enough to have clear title? Are there any mortgages or loans against the property that must be paid off? Has anyone filed a lien against the property due to unpaid taxes or contractor bills? Are there any easements or restrictions that limit how the property can be used? These findings get compiled into a title report that shows what was discovered.

Title insurance is different from other types of insurance. You pay a one-time premium, and the title company insures the property for as long as you or your heirs own it. If a problem with the title is discovered later—such as a forged deed in the chain of ownership or a claim from someone who says they have rights to the property—the title insurance policy covers the legal costs and any financial loss. According to the American Land Title Association, title insurance claims occur in only about 1 in every 1,000 transactions, but when they do occur, they can be financially devastating without coverage.

Lenders typically require title insurance to protect their investment in the property. This is called a lender's policy. Owners can also purchase an owner's policy for additional protection. The cost of title insurance varies by state and the property's purchase price, but it is generally a one-time cost at closing that provides decades of protection.

Practical Takeaway: Title searches examine public records to identify ownership history and potential problems with a property. Title insurance provides financial protection if ownership disputes or title defects are discovered later. Understanding both processes helps explain why lenders require these services and what protections they provide.

Understanding Escrow Services and How Money Is Held

Escrow is a holding arrangement where a neutral third party—in this case, First American or another escrow company—temporarily holds money, documents, or both during a real estate transaction. The escrow agent does not take sides with the buyer or seller. Instead, the escrow agent follows written instructions agreed to by both parties about when and how to release the funds and documents.

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Here is how a typical escrow process works: A buyer and seller agree on a purchase price and sign a purchase agreement that includes escrow instructions. The buyer deposits earnest money (typically 1 to 3 percent of the purchase price) into an escrow account. This money shows the buyer is serious about the purchase. The escrow agent holds this money and does not release it until specific conditions are met. Those conditions might include completing a home inspection, obtaining financing approval, and completing the title search. If the buyer backs out without a valid reason, the earnest money may go to the seller. If the seller refuses to sell, the earnest money goes back to the buyer.

At closing, larger sums of money move through escrow. The buyer's lender sends loan proceeds to the escrow account. The seller's existing lender is paid off from escrow funds. Property taxes, homeowner association fees, and other costs are calculated and adjusted between buyer and seller. The escrow agent calculates all these numbers, prepares a closing statement showing where every dollar goes, and then disburses the funds according to the agreement. Title documents, insurance papers, and other closing documents are also held in escrow until all conditions are satisfied.

First American maintains escrow accounts that are separate from the company's operating accounts. State law requires that escrow funds be held in trust and not mixed with company money. Many states require title companies to carry errors and omissions insurance to protect customers if an escrow account is mismanaged. The escrow process typically takes anywhere from a few days to several weeks, depending on how quickly lenders approve loans and parties provide required documents.

Practical Takeaway: Escrow serves as a neutral holding place for money and documents until a real estate transaction is complete. Understanding that an escrow agent must follow written instructions and cannot release funds without proper authorization helps explain why this process protects both buyers and sellers from fraud and mistakes.

First American Title's Services Across Different States

First American Title operates differently in different states because title and escrow laws vary significantly across the country. Some states are "title states" where title companies handle most closing functions, while others are "attorney states" where lawyers conduct closings and handle escrow. First American adapts its service offerings to comply with each state's requirements and market practices.

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In states like California, Florida, and Texas where First American has significant market presence, the company operates full-service offices that handle title searches, insurance, escrow, and closing coordination. In attorney states like New York and Massachusetts, First American may partner with local attorneys or provide title insurance only. Some states allow title companies to operate title-only services without handling escrow, while others permit comprehensive operations.

First American also operates regional subsidiaries with different brand names. The company owns several smaller title companies that operate under their own names in specific regions. This allows First American to maintain local connections and market expertise while leveraging the parent company's resources, technology systems, and underwriting support. Customers may interact with a local title company without realizing it is part of the First American organization.

State regulations also affect how much First American can charge for services and what services must be offered. Some states regulate title insurance rates heavily, while others allow companies more pricing flexibility. Some states require specific disclosures about costs and services. First American must maintain separate licenses in each state where it operates and must comply with that state's department of insurance rules and the real estate commission's regulations.

Practical Takeaway: First American's operations vary significantly by state due to different laws and market practices. If you are buying property in a different state, the services and processes you encounter with First American may differ from what you experienced elsewhere, which is normal and expected in the real estate industry.

Technology and Record Management at First American

First American Title has invested heavily in technology systems to manage the vast amounts of paperwork and data involved in real estate transactions. The company operates digital platforms that allow customers to access transaction status, view documents, and communicate with closing agents online. These systems have become more important as remote closings and digital document signing have become more common in the real estate industry.

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The company maintains databases of public records