When you take the plunge and make a purchase offer on a home, you and the seller sign a purchase agreement that officially begins the escrow period. Real estate escrow is a time period during which numerous tasks must be completed before the sale can close and you receive the keys to the property. The length of time from escrow to closing in California depends on a variety of factors including the closing date buyers and sellers agree on. A California escrow period in real estate also depends on the time needed to complete all terms of the purchase agreement before the transaction can officially close.
Escrow Time Periods
Although it can vary greatly, the typical time for the escrow to closing process in California is 30 to 60 days. However, you should be aware that the California's escrow period could take up to 90 days in some cases, such as when seller repairs take longer than anticipated. There are actually a wide array of factors that can potentially affect the length of escrow in California. Essentially, escrow closing in the Golden State can only take place after all terms of the purchase agreement have been met; depending on the property in question, these terms can be many.
Read More: What Is a Short Escrow?
Factors Affecting Escrow Periods
The two primary functions of escrow are to allow buyers enough time to secure a mortgage and to give home sellers enough time to find a new home and then move. Agreed-upon escrow time frame dates should also account for various contingencies such as property inspections and title searches. Mortgage lender requirements for borrowers also affect escrow closing dates. Real estate agents can help buyers and sellers calculate a time limit for each escrow task so that a mutually agreeable closing date can be developed, but this date is not necessarily set in stone.
Read More: Settlement Date Vs. Closing Date
Escrow Account Maintenance
Designated escrow agents such as title companies create escrow accounts. An escrow account holds funds and other items until a home's sale closing and purchase is completed. Escrow account funds include buyer down payments and items may include the property sellers' deeds to be transferred.
Escrow agents must also determine funds that are owed by property sellers and buyers, such as for property taxes owed. The companies acting as escrow agents are expected to complete all required tasks by the subject property's sale closing date.
Read More: What Happens After an Underwriter Approves a Home Loan?
Escrow Fee Payments
California escrow fees are typically included in closing costs and payment of fees is negotiated between property buyers and sellers. Escrow fees also vary among states, counties and especially escrow companies. A property's purchase price and the transaction's complexity as well as property location also determines escrow fee amounts you can expect to pay. At least one day before a property's sale closing date, California escrow companies require certified or cashier's checks from the buyer and the seller for the funds needed to close the sale.
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