Escrow Agent vs. Closing Agent: What’s the Difference and Why It Matters
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Escrow Agent vs. Closing Agent: What’s the Difference and Why It Matters
By: Robert Garcia, Esq., Barry L. Miller, P.A., Offices Orlando
Buying or selling real estate should be a fun and exciting experience—when you know what you’re doing. Unfortunately, many buyers and sellers are presented with contracts and told to “sign here,” without understanding what they’re agreeing to. This can lead to costly problems down the road.
Under Florida law, real estate agents are not allowed to provide legal advice. They aren’t trained or licensed attorneys. In fact, many real estate contracts include disclaimers to protect the agent—not you—from liability.
That’s why involving a real estate attorney from the start is a smart move. Legal guidance can save you from post-closing surprises that could cost tens of thousands of dollars.
What’s the Difference Between an Escrow Agent and a Closing Agent?
This is one of the most frequently asked questions from buyers, sellers, and agents. While the roles can overlap, they are not the same:
Escrow Agent
- Holds the buyer’s earnest money deposit (EMD) as a neutral third party.
- Acts as a fiduciary to both parties, safeguarding the funds according to the terms of the contract and escrow agreement.
- Must comply with Florida law regarding escrow handling and banking practices.
Closing Agent
- Facilitates the entire closing process and prepares required legal documents.
- Manages title and settlement services to legally transfer ownership from seller to buyer.
- Prepares the deed, bill of sale, settlement statement, and required notices or affidavits.
Sometimes, the escrow and closing agent are the same entity—but not always. For example, a buyer might request their attorney hold escrow, while the seller names a separate title company to conduct the closing.
Why You Should Know Who Your Escrow Agent Is
It’s important for both buyers and sellers to verify who the escrow agent is and ensure they are reputable and compliant. Here’s why:
- To confirm compliance with Florida law regarding escrow funds.
- To ensure funds are held in a secure and reliable financial institution.
- To protect against the risk of funds being lost if the agent goes out of business or files for bankruptcy.
These risks become more real during periods of economic downturn. Always ask the right questions and verify credentials.
Key Takeaway
Always have a knowledgeable real estate attorney on your side to guide you through the sales process. The experienced attorneys at Barry Miller Law are here to help you navigate your transaction from contract to closing.
If you or someone you know has legal questions about real estate, business, or probate law, contact our office at (407) 423-1700 or email us at info@BarryMillerLaw.com to schedule a consultation.
Disclaimer: The information provided above is for informational purposes only and should not be construed as legal advice. Each real estate transaction is unique and may require specific legal guidance. Barry L. Miller, P.A. does not represent you unless you have signed an official engagement agreement with the firm.
