Buyers and sellers of a piece of property establish terms and conditions for the transfer of ownership of the property. These terms and conditions are given to a third party known as the escrow holder. In turn, the escrow holder has the responsibility of seeing that the terms of the escrow are carried out. The escrow is an independent neutral account and the vehicle by which the mutual instructions of all parties to the transaction are complied with.

Whether you are the buyer or the seller, you want assurance that no funds or property will change hands until all instructions have been followed. With the increasing complexity of business, law, and tax structures, it takes a trained professional to supervise the transaction.

​

The length of an escrow is determined by the terms of the purchase agreement/joint escrow instructions and can range from a few days to several months.

The selection of the escrow holder is normally done by agreement between the principals. If a real estate agent is involved, they may recommend an escrow holder.

Escrow instructions are written directions signed by the buyer and seller that outline the

specific steps the escrow company must follow to close the transaction. These include

delivery of funds, title transfer, and lien releases.

Escrow fees vary based on sales price and company but generally range from $1.00 to $2.50

per $1,000 of purchase price, plus base charges. Fees are usually split 50/50 between buyer

and seller unless otherwise negotiated.

Yes, but both buyer and seller must agree on the selected escrow company in the purchase

contract. Otherwise, a mutual escrow is opened per the agreed terms.

Buyers generally deposit their earnest money into escrow within 3 business days of the

accepted offer, unless otherwise stated in the contract.

Escrow closes when all conditions are met, funds are disbursed, and the grant deed is

recorded with the county recorder’s office. Your agent and escrow officer will notify you

when it’s official.

During escrow:

- The buyer secures financing and conducts inspections

- Title reports are reviewed

- Contingencies are removed

- Final documents are prepared and signed

- The escrow company disburses funds and records the deed with the county

No. Escrow is a neutral process that manages the transaction. Title companies ensure the

property title is clear and issue title insurance. In California, some companies may offer

both escrow and title services.

Refinance escrow handles payoffs, new lender documents, and title updates, but there’s no

buyer/seller exchange. It's generally faster and has fewer contingencies.

If the buyer or seller cancels under a valid contingency, the escrow is canceled and funds

are refunded per the contract. If not, a dispute may arise over the release of the deposit.