What do title companies frequently use instead of contracts generated by real estate licensees?

Title companies frequently utilize escrow instructions instead of contracts generated by real estate licensees because escrow instructions provide a clear, detailed framework for how a transaction should proceed once the parties have come to an agreement. These instructions are crucial in guiding the title company and ensuring that all steps—from the initial deposit to the final transfer of ownership—are followed in accordance with the agreements made by the buyer and seller.

Escrow instructions serve multiple functions: they clarify the roles of the parties involved, outline the conditions that must be met for the transaction to close, and provide specific directions regarding the handling of funds and documents. This level of specificity is essential for title companies to accurately carry out their duties and protect the interests of all parties involved in the real estate transaction.

In contrast, contracts for sale, while foundational to the agreement between buyer and seller, do not typically provide the systematic instructions needed for a title company to execute its responsibilities properly. Likewise, verbal instructions lack the formality and clarity required to guide the transaction effectively, leaving room for misinterpretation or oversight. Loan documents are related to the financing of the property but do not encompass the complete set of directives needed for the closing process managed by a title company.

Thus, escrow instructions are essential tools that title companies