Closing the Deal

What is Escrow?
Escrow is a neutral third party that holds money and documents while the buyer and seller complete a home sale. The escrow officer makes sure everything in the purchase contract is followed before closing.

In other states, this may be called "Settlement."

How Escrow Works

• Escrow holds your deposit, lender funds, and signed documents.

• The officer follows your contract and lender’s instructions.

• Everything must be completed and signed before escrow can close.

Escrow Officer Tasks:

• Collect and hold funds/documents

• Work with buyer, seller, and lender

• Handle title reports, insurance, taxes, and deed recording

• Disburse money and prepare final accounting

Opening Escrow

Your real estate agent usually opens escrow once your offer is accepted. Your deposit goes to the title company and gets documented.

Escrow Instructions

These list out what must happen before the deal is done—like who pays what and when documents need to be signed.

What You May Need to Provide

You might need to fill out an identity form (for background checks), including things like your birthdate and SSN. It stays private.

How Long is Escrow?

Usually 30–45 days, but it depends on the contract.

Your Role as the Buyer

• Review documents like the Transfer Disclosure Statement (TDS) carefully.

• Ask about anything left blank or marked "unknown."

• Speak up about concerns—zoning, schools, nearby noise, or future development.

Extra Protection: Home Warranties

You or the seller can buy a warranty for $500–$800. It covers things like plumbing and electrical. Service calls usually cost $60-$125.

Buyer Disclosures to Know

Lead-Based Paint
If the home was built before 1978, sellers must:

• Give you a lead paint brochure

• Disclose known hazards

• Let you test within 10 days

Natural Hazards (NHD)
You’ll be told if the home is in a:

• Flood zone

• Fire zone

• Earthquake/seismic hazard area

• Other hazard zones

Mello-Roos
In newer neighborhoods, extra taxes may apply. You'll get a “Notice of Special Tax” and have 3–5 days to cancel if needed.

Buying Condos or HOAs

If you’re buying in an HOA community, you’ll get:

• Rules (CC&Rs)

• HOA budget and reserves

• Insurance info

• Monthly and special assessment fees

• Any pet, rental, or age restrictions

Megan’s Law

You can search online or by phone to see if registered sex offenders live nearby:
https://www.meganslaw.ca.gov

Loan Process: Step-by-Step

1. Apply for Loan – Discuss your budget and loan options.

2. Automated Review – System checks your credit, income, debt, etc.

3. Send Docs – You’ll provide tax forms, bank info, etc.

4. Find a Home – You go under contract.

5. Loan Submission – Loan package is sent for final review.

6. Loan Approval – Underwriter confirms you meet all conditions.

7. Rate Lock – Your interest rate is finalized.

8. Loan Docs Signed – You sign at the title/escrow office.

9. Funding – Your funds are transferred (wire/cashier’s check only).

10. Recording – Deed is filed at the county, and the home is officially yours!

Who Pays What?

Sellers Typically Pay:

• Listing Agents Realtor commissions

• Transfer taxes & recording fees

• HOA docs & dues

• Repairs (if agreed)

• Home warranty (if agreed)

• Mortgage payoffs and liens

Buyers Typically Pay:

• Buyers Agent Realtor commission

• Escrow and loan fees

• Title insurance

• Recording fees

• First-year home insurance

• Property taxes (from closing date)

• HOA transfer fees

• Home inspections

• Loan interest and charges