How Escrow Works — And Why It Protects You
Escrow is the period between an accepted offer and the day ownership officially transfers. In California, escrow is managed by a licensed, neutral third party that helps ensure the transaction is completed properly and securely.
Think of escrow as the structured bridge between “offer accepted” and “keys in hand.”
What Is Escrow?
Escrow is a process where funds, documents, and written instructions are handled through a neutral third party while the buyer and seller complete the terms of the purchase agreement.
- The buyer’s deposit is held securely
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Loan funds and paperwork are coordinated
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Title work and required documents are processed
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Contingencies and conditions are tracked to completion
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Ownership transfers only after everything is complete
No money is released and no ownership transfers until the agreed-upon conditions are satisfied.
What the Escrow Holder Will Do
- Safely hold the buyer’s deposit
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Receive and disburse funds according to written instructions
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Coordinate with the title company and lender
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Prepare settlement statements and closing documents
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Ensure required documents are signed and delivered
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Record the transfer of ownership with the county
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Close escrow once buyer and seller instructions are complete
What the Escrow Holder Will Not Do
- Negotiate contract terms for you
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Choose sides — the escrow holder must remain neutral
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Change the purchase agreement
- Decide disputes between buyer and seller
Typical Escrow Timeline for Buyers
1) Escrow opens + deposit is submitted
After your offer is accepted, escrow is opened and your deposit is delivered according to the contract timeline.
2) Inspections + disclosures
You review disclosures and complete inspections so you understand the home’s condition and any key details.
3) Appraisal + loan underwriting (if financing)
Your lender orders the appraisal and finalizes underwriting while escrow coordinates needed documentation.
4) Contingencies are addressed
If repairs, credits, or clarifications are needed, this is when they’re negotiated and finalized.
5) Signing + final walkthrough
You sign final documents and complete a final walkthrough to confirm the property condition matches expectations.
6) Recording + keys
Once the deed is recorded with the county and funds are confirmed, escrow closes and you receive possession.
Common Buyer Questions About Escrow
Escrow timelines and requirements can vary slightly depending on financing, contingencies, and property type.
- When is my deposit refundable? This depends on your contingency timelines and the contract terms.
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What happens if inspections reveal issues? You may renegotiate, request repairs/credits, or proceed as-is.
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How long does escrow take? Many escrows run 21–30 days, depending on financing and contingencies.
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When do I wire funds? Typically after final loan approval and escrow provides secure wiring instructions.
Our job is to keep the process clear and coordinated so you always know what’s next — and what matters most.
Escrow is one stage within the larger purchase journey.
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