In the state of California, most of the real estate trades employ independent escrow firms. Atypically, escrow continues to be one of the least-comprehended segments of the real estate process.

Independent Escrow

For this reason, the property buyers and sellers often go with the lender or real estate broker to suggest them as an escrow company. Most buyers don’t recognize that they assign independent escrow companies to protect their funds with utmost trust. The escrow holder is primarily liable to ensure that all the essential guidelines stated in the agreement are properly implemented and protect the consumers’ interests.

The escrow holder must stay unbiased during the entire escrow process to a reasonable representation of all parties. Hence, the buyer, lender, the broker must make an educated judgment while electing an independent escrow company.

Licensed vs. Controlled Independent Escrow

In California, all the escrow companies can be categorized into Licensed or Controlled. The licensed independent escrow companies are licensed by DFPI (California Department of Financial Protection and Innovation. The license controls the company practices and procedures and disciplines them to stringent obligations intended to safeguard clients. 

Controlled escrow companies are those non-licensed enterprises owned by various entities like banks, mortgage brokers, savings and loans, title insurance companies, real estate brokers. These Controlled Independent Escrow Companies have widely varying regulations and obligations and fall under the authority of several supervising agencies. However, none of the controlled escrow companies are imposed with stringent policies like the licensed escrow companies have.

Neutral Third Party

A licensed independent escrow company is the best practical neutral third party to carry out your real estate contract. Whether you are searching for one for yourself or suggesting one to a consumer, a licensed escrow company gives you the best aid.

Regulatory Organization

Escrow firms are regulated by the Escrow Law, mentioned in Division 6 of the California Financial Code, and controlled under Title 10 of the California Code of Regulation. Any escrow license-related questions should be directed to the Department of Financial Protection and Innovation, 320 Fourth Street, Suite 750, Los Angeles, California 90013.


Escrow Agents License Bond and license-authorized affiliation in Escrow Agents’ Fidelity Corporation, a California non-profit communal benefit corporation, is discovered in the California Financial Code, Section 17312. Maintenance requirements of tangible net worth and overflow of liquid assets are set down in Section 17210 of the California Financial Code.