Escrow vs Attorney Closing
The biggest factor determining how your real estate closing works is whether your state uses an escrow system or requires an attorney. Here's everything you need to know about both.
Escrow Closing
An independent escrow company or title company acts as a neutral third party, holding funds and documents until all conditions of the sale are met.
- ✓ No attorney required
- ✓ Lower legal fees
- ✓ Title company issues insurance
- ✓ Common in Western states
- ✓ Escrow officer coordinates all parties
Attorney Closing
A licensed real estate attorney conducts the closing, prepares or reviews all legal documents, and certifies that title is being properly transferred.
- ✓ Attorney legally required
- ✓ Legal expertise on-site
- ✓ Title opinion issued by attorney
- ✓ Common in Eastern/Southern states
- ✓ Attorney prepares deed and documents
Side-by-Side Comparison
| Feature | Escrow State | Attorney State |
|---|---|---|
| Closing conducted by | Escrow / title company | Licensed real estate attorney |
| Attorney required? | No (optional) | Yes (mandatory) |
| Title opinion | Not required | Often required by attorney |
| Documents prepared by | Title company staff | Closing attorney |
| Typical closing fee | $300–$800 | $500–$1,500 |
| Who holds earnest money | Escrow company | Attorney trust account |
| Common regions | Western USA | Eastern & Southern USA |
| FSBO-friendly? | ✓ Very (direct access) | ✓ Yes (attorney handles complexity) |
The Third Category: Title Company States
Many states don't fall neatly into either category. In states like Ohio, Indiana, Michigan, and Pennsylvania, title companies or settlement agents handle closings — no escrow company required and no attorney mandate. These states offer flexibility, and attorneys are commonly used even though they're not required.
Which Is Better for FSBO Sellers?
Neither is objectively better. Both systems produce legally valid closings. For FSBO sellers:
- → Escrow states: You work directly with a title company. Often faster and slightly cheaper. You may want to hire a real estate attorney for contract review even if not legally required.
- → Attorney states: The attorney handles most closing logistics. The added cost is offset by legal protection and document accuracy. Many FSBO sellers appreciate the guidance.
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