Two different uses of the word escrow
Purchase escrow holds funds and documents while the parties complete the transaction's written conditions. A mortgage impound account collects money over time for designated property bills after closing. Ask which account someone means before interpreting an escrow payment or fee.
The escrow holder follows written instructions. It does not replace the buyer's inspection, an attorney's advice or the lender's underwriting decision. California escrow providers may operate under different licensing or regulatory arrangements. Verify the provider appropriate to your transaction. DRE: Understanding the escrow process.
Build the closing calendar from the contract
After an accepted offer, confirm who opens escrow, where the deposit goes and when it is due. Record inspection, appraisal, financing and other contractual deadlines separately. The target close date is a coordination goal rather than a guarantee of loan approval or recording.
Ask the escrow officer which documents and funds are outstanding. Ask the lender which underwriting conditions remain. An appraisal appointment, signed loan package or funding instruction is a milestone, but none should be treated alone as proof that ownership has transferred.
Review instructions and money movement
Read the escrow instructions, preliminary title information and settlement charges. Compare the Closing Disclosure with the most recent Loan Estimate and ask about differences. Identify deposits already credited, seller credits, loan proceeds and your remaining cash to close. Confirm how prorations and property bills are handled.
Before wiring funds, verify instructions through a trusted phone number established independently. A last-minute email change deserves a separate check. Keep the transfer confirmation and ask escrow to confirm receipt through the established channel. DRE: Consumer escrow guide.
Understand cancellation before it becomes urgent
Deposit rights and cancellation consequences depend on the contract, the facts and applicable law. Do not assume a deposit is automatically refundable because the loan is delayed. Ask your agent or attorney about contingencies and obtain legal advice when a dispute arises.
The escrow holder generally needs appropriate instructions to release disputed funds. A verbal promise from one party may not resolve competing claims. Keep all amendments and cancellation instructions with the original agreement. Escrow fees also follow the transaction's arrangement rather than one universal statewide split.
Close the loop after signing
Confirm funding, recording, disbursement and possession with the responsible parties. Key delivery may follow a separate contractual agreement. Save the final settlement statement and recorded documents, then identify the first mortgage payment and current servicer.
If an ongoing impound account is established, review its initial statement and the bills included. Ask who handles any supplemental tax bill. ECHL can coordinate mortgage questions; the escrow holder manages its instructions and your agent or attorney addresses contract questions.
Sources & further reading
- dre.ca.gov — EscrowProcess
- dre.ca.gov — Escrow Info Consumers
- Consumer Financial Protection Bureau — closing disclosure
This article is maintained by Equity Capital Home Loans. Program rules can change. Confirm the requirements for your property and loan before making a decision.