How escrow works
From open to close, step by step.
What happens to your file, step by step, until the deed is recorded.
Your file
Step 3 of 5
Conditions are cleared
Payoff statements requestedDone- Documents collectedDone
Parties updated on open itemsNow
Who does what
Five parties, one neutral file.
Select a role to see what that party is responsible for during escrow.
Role
The buyer
Signs the purchase agreement and the escrow instructions- Deposits the earnest money into escrow
- Provides loan documents through the lender
Role
The seller
- Signs the escrow instructions
- Provides the deed, legal disclosures and HOA documents
- Receives the proceeds at closing
Role
The lender
- Provides the loan documents
- Sends the loan funds after signing
- Receives the payoff of an old loan in a refinance
Role
Real estate agents
- Send the signed purchase agreement to open escrow
- Stay updated on open items
- Coordinate with the escrow officer
Role
Escrow, the neutral party
- Holds the deposit and funds in trust
- Follows the written instructions signed by both sides
- Collects and reviews documents, then coordinates the closing
How it works
Five steps, from opening to closing day.
A typical escrow. Timelines depend on your contract, your lender and the other parties.
- 01Done
Open escrow
The signed purchase agreement arrives and the earnest money deposit is received.
- 02Done
Instructions and disclosures
Everyone reviews and signs the escrow instructions.
- 03Now
Conditions are cleared
Inspections, appraisal and loan approval. We request payoffs and collect documents.
- Request payoff statements
- Collect required documents
- Update all parties
- 04Next
Sign and fund
Sign at our Covina office or electronically. The lender sends the loan funds.
- 05Next
Close and record
The deed is recorded, funds are released and every party gets a final statement.
Opening escrow in California
What you need to open escrow.
Have these ready and we can open your file right away.
Usually required
Signed purchase agreement
The contract between buyer and seller
Earnest money deposit
Held in escrow from day one
Identification
From each party in the transaction
Signed escrow instructions
The conditions both sides agree on
May also be needed
- Loan documents
- Title commitment
- Disclosures
Source: our guide to the escrow process in California.
Escrow in California
Who is allowed to handle escrow in California.
Check who is holding your money before you open escrow.
- 01DFPI
Licensed independent escrow companies
Regulated by the Department of Financial Protection and Innovation (DFPI). Lightspeed Escrow is one of them.
- 02Dept. of Insurance
Title insurers
Regulated by the California Department of Insurance.
- 03Exempt
Certain exempt institutions
Some banks, credit unions and attorneys are exempt under specific conditions.
Escrow glossary
Terms you will hear during escrow.
Short definitions, with a full guide on our blog for each one.
Proration
How property costs such as taxes and fees are split between buyer and seller at closing.
Read the guide: Proration
Preliminary title report
What it shows about the property and why it matters before closing.
Read the guide: Preliminary title report
Fiduciary relationship
A relationship with duties of trust, like the one between an escrow holder and the parties.
Read the guide: Fiduciary relationship
Sub-escrow
A supporting escrow role, how its fees are calculated and why it keeps the closing smooth.
Read the guide: Sub-escrow
Estimated escrow
What it includes and how it affects your monthly mortgage payment.
Read the guide: Estimated escrow
1031 exchange
How investors can defer capital gains under IRS rules and timelines.
Read the guide: 1031 exchange
Start your escrow
Have a transaction coming up?
Answer three short questions. An escrow officer calls you back.
Licensed by the California DFPI- Member of the Escrow Institute of California
- Service in English and Español
Prefer to talk?(626) 655-7839