Short answer

It depends on the written escrow/closing instructions and the protections the buyer (or lender) requires. Under Georgia practice, an escrow agent or closing attorney generally should not disburse trust/escrow funds to a seller until either (a) the deed has been properly recorded or (b) the parties have agreed in writing to an alternative safe mechanism (for example, confirmed payoff of liens, a recorded release of encumbrances, or an unconditional title insurance commitment that covers the party taking the funds). Releasing funds before recording can create risk for the buyer and may expose the escrow agent or closing attorney to liability.

Detailed answer — Georgia law and practical rules

Georgia recording law makes public recording critical to protecting ownership and mortgage priority. Recording a deed gives constructive notice to the world and is central to resolving competing claims to property. See O.C.G.A. § 44-2-2 (recording and notice). For the text and statutory context, see: O.C.G.A. § 44-2-2.

Key legal and practical points relevant in Georgia:

• Escrow/closing instructions control disbursement. Funds held in trust are typically governed by the escrow agreement or closing instructions agreed to by buyer, seller, lender, and escrow/settlement agent. Those instructions commonly require delivery and recording of the deed (or the closing agent’s receipt of a recorded deed) before releasing seller proceeds.
• Recording protects purchasers and lenders. If the deed is not recorded and the seller receives funds, a later claim (for example, a prior lien or a later purchaser who records first) could cloud the buyer’s title. Georgia’s recording statute gives priority to recorded instruments and provides constructive notice once recorded (O.C.G.A. § 44-2-2).
• Title companies and closing attorneys use checks and procedures to manage risk. Title companies and closing attorneys often will not disburse seller proceeds until the deed has been recorded or until a title officer determines that alternative protections are adequate (such as documented payoff of all liens and a title insurance commitment or a post-closing recorded release). If closing counsel or a title company ignores agreed instructions, they may be liable for resulting losses.
• Exceptions sometimes exist, but require protection. Parties sometimes agree to release funds prior to recording if the buyer receives alternate protections: immediate issuance of an ALTA title binder/commitment that insures the buyer, a recorded mortgage or “satisfaction” showing liens were paid off, certified confirmation of recording within a short time window, or escrow holdbacks with indemnities. These exceptions should be written and accepted by all relevant parties (including the lender, if there is one).

Typical practical rule used in Georgia closings

Most closing agents follow a simple checklist: record the deed first (or obtain recorded instrument back from the clerk), then disburse funds. That preserves the buyer’s recorded title and avoids disputes. If a buyer’s lender is involved, lender instructions usually require recording the deed and mortgage before the lender or title company releases payoff funds.

Hypothetical example

Hypothetical facts: Buyer deposits purchase funds with TitleCo. Seller signs deed but will not deliver the deed to be recorded until TitleCo wires seller proceeds. TitleCo follows written instructions stating it will not disburse until it receives the recorded deed from the county clerk. TitleCo records the deed and then wires funds to the seller. That is the safe, usual course.

Contrast: If TitleCo wires funds first and the seller pockets the money without the deed being recorded, and later a prior lienholder forecloses or an earlier deed appears, Buyer may be left with an unrecorded, unprotected interest and TitleCo (and possibly the seller) may be liable for the loss.

When might funds be released before recording?

• All parties sign written instructions allowing an early release and those instructions provide adequate protections.
• Title insurance company issues an immediate binder or commitment that insures against unrecorded defects, and the insurer accepts responsibility for risks created by early disbursement.
• Certified payoff letters show liens will be cleared and the closing agent has a mechanism (e.g., holdback) to ensure the payoff is recorded promptly.

Practical steps to protect yourself

1. Insist that the closing/escrow instructions require the deed to be recorded before the seller receives funds, unless a written alternative is negotiated.
2. Use a licensed closing attorney or reputable title company and confirm their recording procedures in writing.
3. Obtain a title insurance commitment and confirm when actual coverage begins; ask whether the policy covers releases of funds before recording.
4. Get written confirmation of recording from the clerk (recording receipt or recorded instrument number) before authorizing wire of seller proceeds.
5. If you must agree to an early release, create a documented fallback: indemnity, escrow holdback, or insurer commitment that explicitly covers the risk created by early disbursement.

When to consult a lawyer

Talk with a real estate attorney if any of these apply: (1) the seller or closing agent asks you to accept an early release, (2) conflicting title matters appear in public records, (3) the closing agent will not follow your written instructions, or (4) you need help drafting escrow/closing instructions or negotiating a safe alternative to recording-first disbursement. An attorney can review the closing documents, advise on risk, and prepare written protections.

Helpful Hints

• Do not verbally approve release of funds — get written instructions.
• Ask for the recording information (instrument/book/page or recording number) before funds move.
• Confirm what the title insurance policy will and will not cover; read exclusions carefully.
• For large or unusual transactions, require a short “post-closing” escrow for a limited amount to cover unidentified payoffs or issues identified after recording.
• Know who holds the funds: an attorney trust account, title company escrow, or an independent escrow agent — different holders have different obligations and malpractice/ethical rules.

Disclaimer: This article explains general Georgia practice and statutory concepts; it is not legal advice. For help specific to your transaction, contact a licensed Georgia real estate attorney who can review your documents and circumstances.