What happens if the escrow agent cannot clear the title?

When an escrow agent is unable to clear the title, it often signifies that there are issues or claims against the property that must be resolved before a proper transfer of ownership can take place. In this context, the role of the escrow agent is to facilitate the transaction by ensuring that all conditions, including a clear and unencumbered title, are satisfied before the closing occurs.

If the title cannot be cleared, the typical course of action is to cancel the sale. This means halting the transaction entirely, and the escrow agent is responsible for returning everything to the respective parties involved—typically the buyer and the seller. This process helps protect everyone’s interests, as proceeding with a sale on a property with unresolved title issues could lead to significant legal and financial complications for both parties. By canceling the transaction, the escrow agent ensures that the buyer does not end up with a property with unresolved claims and that the seller does not need to deal with potential backlash from an incomplete sale.