Hi Maryd, Great question. The title company's responsibilty is to act as a neutral third party that represents all principal parties of the escrow process. In simple terms, they will aquire acknowledgements from those parties in agreement of where considerations will be made.
Liens that are effective will be released through appropriate means, agreed to by all parties, within the escrow instructions.
Example 1 : Lien holder "A" wants $1000 to release the effective lien. Title will use funds from seller "B" to release lien and lien will be released and title will be clear for Buyer "C".
Example: 2 Lien holder "A" wants $1000 to release the effective lien. Seller "B"has no funds to "pay off" lien. Buyer "C" may pay lien or lien holder may unconditionally release without recourse in some cases.
Both examples will be facilitated by the title company. The title company will insure all parties agree, by acknowledgement of appropriate forms/documents, and releases will be recorded at the County Recorders Office within the county the property exists....Leaving a clear title to transfer to new owner.
Title companies are a very important piece of the Real Estate sales process. Seller's, who are paying the lion's share of the cost of sale, have a choice of which Title company they wish to use. Shopping around will save some money. Your Realtor can make recommendations and may negotiate a more reasonable escrow fee on your behalf.