(925) 786-5064
(925) 786-5064
(925) 786-5064
 What Is Escrow on a House?

What does it mean when real estate agents say “you are now in escrow”?

If you are a first-time buyer or a seller who hasn’t been involved in a transaction for a long time, the escrow period may be confusing.

In simple terms, here is how it works:

When a seller and buyer come to terms regarding the offer and all signatures are on the contract the contract is submitted to a title company to handle the escrow.

Escrow here in northern California is held by a title company. What that means the contract is sent to the title company, the buyer remits the earnest money as a deposit which can be from 1% to 3% of the sales prices and is held in an escrow account by the title company. The title company manages the disbursement of all funds.

The escrow period is generally 30 days, actual days not business days, and the counting starts the next day after the contract is fully executed.

    • For the seller there isn’t much to do once they have provided the buyer with all the disclosures.  It is a waiting period while the buyer works on removing their contingencies.
    • During the escrow period the buyer will perform all of the inspections which not only include the physical inspections, they must review all the disclosures the seller has given them and accept.
    • The buyer’s lender will order the appraisal and get the buyer’s file in order to be submitted to the underwriter. This only occurs after all buyer docs are in and a completed appraisal has been provided to the lender.
    • In order to proceed to closing, the buyer must remove all contingencies from the contract per the dates listed on the contract.
An escrow fee paid to the title company for managing the escrow and can be paid by the buyer or the seller, this varies by County.  The earnest money the buyer submitted is applied to the down payment. Once both the buyer and seller have signed the closing documents, the loan is funded and then recorded at the County. Title only passes to the buyer when the deed is recorded.


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