Title Company

A title company researches the ownership history of a property, issues title insurance, and in many areas runs the closing. It often doubles as the escrow agent that receives the buyer's earnest money and disburses all funds on closing day.

In states where title companies handle escrow, the buyer usually sends the earnest money to the title company named in the contract. On a $500,000 purchase with $10,000 down as earnest money, the title company shows that $10,000 as a credit to the buyer on the closing paperwork.

Because buyers wire money to title companies, scammers pose as them. Always confirm wiring instructions by calling a number you found yourself. How to pay earnest money walks through safe payment steps, and the wire fraud entry describes the scam.