What Is The Escrow Process in California

The Escrow Process in California

What Is The Escrow Process in California

When dealing with real estate, there are many technical terms that the average person may not fully understand. One of these important terms is escrow. Escrow is defined as the process of depositing funds and/or documents, necessary for the sale of the real estate, with an escrow agent (a neutral third party). The escrow agent will keep the funds and/or valuable items secure until the conditions of an agreement among the parties have been met. Once these conditions have been met, the titles, funds, or other documents are then transferred to the other party.


Do individuals really need the escrow process? Yes. It allows for the relevant parties to meet the conditions of the written agreement or contract they have signed, without exchanging funds or valuable documents. Otherwise, such a transfer of funds would come with the possibility that the other party will not fulfill their requirements. Moreover, the escrow agent will ensure that none of these funds will ever leave their possession, unless each condition has been met.


The parties involved in the real estate transaction will determine the escrow instructions and conditions for the escrow agent. Some of the escrow agent’s responsibilities include holding the funds securely, following the instructions of the escrow, and properly transferring the funds once the conditions have been met. At the final step when all conditions are satisfied, escrow is deemed closed. The escrow agent must be licensed or part of a controlled escrow company under California escrow law. When the parties are choosing an escrow agent, it is their responsibility to choose one that is qualified to perform the tasks, and has the necessary experience.

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