An escrow is a deposit of funds or deed from one party, with the intention to deliver it to the other party upon completion of a series of events, as laid out in a contract.  Escrow "opens" upon delivery of escrow instructions and a fully executed real estate contract to a certified escrow company.  The escrow officer processes the escrow, essentially by making sure all of the terms of the agreement set forth by both parties have been met.  Once they have all been met, and the trust deed is recorded at the city recorder's office, funds/deed change hands and escrow is then "closed."  In short, Escrow makes sure everything that the buyer and seller agree upon in the contract are carried out correctly.  

Escrow officers and companies are completely neutral third parties.  They work with both buyers and sellers, but they don't work FOR buyers or sellers.  They safeguard the items at stake in the transaction, and do not convey them until all the ducks are in a row.  Escrow helps to protect lenders, buyers, sellers, real estate agents, brokers, etc.  In general, the buyer and seller will communicate with Escrow only minimally, for example, when transferring their Earnest Money Deposit.  Otherwise, the buyer and sellers' agents will be in close communication with Escrow and will relay all relevant information to their clients.  

It depends.  Escrow should take the number of days that the buyers and sellers agreed upon in their purchase contract.  In California, buyers who are getting a mortgage typically take between 12 and 35 days to close Escrow. Cash investors, on the other hand, may dictate that they want only a few day Escrow closing so they can take possession more quickly.  

In California, buyers and sellers usually share the cost of the Escrow fees.  There are two ways to go about this; fees can either be split 50/50 or the buyer and seller can each pay their own share of the fees.  Escrow fees can be estimated at $2 per $1,000 of the purchase price, plus $250.  

As with everything else in a real estate transaction, who chooses the Escrow company is up for negotiation.  Often, buyers and sellers do not know of an Escrow company they want to work with.  It is then up to the Realtors involved in the transaction to select an Escrow company.  Buyers' agents can write in a suggested Escrow company into the RPA, and the sellers' agent can counter the suggested Escrow company and ask for another one.  There are many reputable and successful Escrow companies in San Diego for buyers and sellers to work with.  


Posted by Christie Gray on
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