Find out what escrow means in California and how it works.
California has specific requirements for the escrow process.
Just as in other markets, the time required for the escrow process is dependent on the complexity of the purchase. A cash purchase may require only days, while a complex process involving required repairs or sale contingencies can take many months to complete. The average is generally 30-60 days.
During the sale of a home, escrow requirements are driven by the buyer’s lender and his or her policies. In the event of a cash transaction, escrow may not be required, however it is recommended for the protection of each party to the transaction.
An escrow provider must be a corporate entity licensed by the California Corporations Commissioner to receive escrows for deposit or delivery. An escrow agent is employed by the escrow provider to facilitate the necessary services.
Escrow fees are generally regulated by the agencies regulating the parent company. For example, in the case of bank-based escrow services, the regulator is the California banking commission or the FDIC. In the case of broker-owned escrow companies, the regulator is the state’s real estate commission.
Escrow fees are generally about 0.2% of the property price plus an additional $200-250 dollars. Endpoint offers one flat, low rate of $1000 per side regardless of the price of the home.
Escrow laws in California exist to protect you when you entrust funds to an escrow agent in the state. Anyone who wants to do business as an escrow agent is required to obtain a license and comply by California escrow laws.
Under escrow laws in California, agents must act as a neutral third party between the buyer and seller throughout the entire real estate transaction. Agents should never be involved in negotiations or disputes and should maintain confidentiality. Additionally, escrow agents can only process a transaction according to the specific details agreement decided on between the buyer and the seller.