When selling a Palo Alto home your real estate agent will suggest that you open an escrow account with a title company before you put your home on the market. Most agents have title companies they prefer to use and an escrow officer with whom they like to work. For example I always choose Lee Kocjan with Fidelity National Title in San Carlos.
Most agents will have worked with a specific escrow officer so if you have someone you want to work with be sure and let your agent know.
The escrow officer will order a preliminary title report. This will confirm who has the right to sell the property, who has a lien on the property (your mortgage and property taxes, and possibly someone else), and will show any easements on the property. All of these things should be reviewed before you put your Palo Alto home on the market to make sure you have plenty of time to deal with any issues that may show up on the title report. For example there may be a lien on there you know you have paid off, but for some reason did not get recorded. The escrow officer can help you with that. You will be purchasing title insurance to protect the buyer in case there are any future claims by anyone who says they have an interest in the Palo Alto home you are selling.
When selling your Palo Alto home the escrow account will be the place where all the monies are held before being dispersed after close of escrow. The buyer's deposit, down payment, and loan proceeds will be help in escrow until ready for disbursement. The escrow officer will figure out the prorations for taxes and paying off your liens before dispersing the money from selling your Palo Alto home.
After all monies are in escrow and both parties agree the title company will take the deed from the person selling the Palo Alto home to the county and record it in the name of the new buyer.
To summarize when selling your home in Palo Alto the title company makes sure the new buyer has clear title to the property and records the deed. The escrow branch collects the money and then disperses it a close and makes sure everyone who is owed money gets it, and then the seller of the Palo Alto home gets the rest.