Recently, I have been doing transactions around the state, not just in the Bay Area. Over the past few years, I have also done many REO (bank owned) sales where the escrow was out of Southern California.
Here in NorCal, Escrow and Title, which are really two separate functions, are handled by one company. Your Escrow and Title officers are the same person.
Escrow is the third party handling of the execution of the entire contract, including the terms, and the transfer of moneys between parties.
Title is two parts. The first is the title search, which is the discovery process for the insurer, who shares that information with the principal parties to the transaction through a Preliminary Title Report. The second part is the generation of the Title insurance policy itself, which protects a buyer or seller from "occult" liens and title transfers.
In Southern California, these are two different companies.
For some unknown reason, Southern California Escrow companies charge from three to four times what Northern California Escrow/Title Companies charge, and then have additional charges to the Title company, referred to as "sub-escrow" charges. We are not talking small amounts here. The cost in the north for a recent escrow was $1170, plus $150. The cost for the exact same escrow in Southern CA was $3260, plus $200, plus $70, plus $150. I believe that is a $2,360 difference. For nothing, as far as I can tell.
I don't have any idea how or why SoCal gets away with this, because it offers no other services to buyers and sellers that I can see. In fact, the SoCal escrow I just finished, didn't provide the seller with a DVD of all the transaction documents and my local company does.
On another note, aside from the increased costs, I have found that having an addition company involved in transaction, adds to the potential for problems. My southern escrow experiences have never, without exception, gone as smoothly as their northern counterparts.
Finally, Real Estate Brokers have "affiliations" with escrow companies in the Southern part of the state, and that is no where to be found up here. Those affiliations lead to loyalty to the agent they represent more often then those who are unaffiliated. This is not a good thing for the unaffiliated party to the transaction.
