How Escrow Works When You Buy or Sell a Home in California
Figures and rules in this post are as of November 6, 2026, from the sources linked below. Check the source for any later update.
In Southern California, a neutral escrow holder, usually an independent escrow company or a title company’s escrow division, holds the money and documents until every condition of the purchase contract is met. Escrow companies in California are licensed by the Department of Financial Protection and Innovation, or are exempt as banks, title companies or attorneys.
Typical steps
- Opening: Escrow opens after both parties sign the purchase agreement. The buyer deposits the earnest money within the time the contract sets.
- Title: The title company issues a preliminary title report listing liens, easements and other recorded items.
- Disclosures: The seller delivers required disclosures, such as the Transfer Disclosure Statement and Natural Hazard Disclosure.
- Contingencies: The buyer completes inspections, appraisal and loan approval within the contract’s contingency periods, then removes contingencies in writing.
- Loan and funds: The lender sends final loan documents. The buyer signs, often with a notary, and wires the remaining funds.
- Closing: The deed is recorded with the LA County Registrar-Recorder, funds are disbursed, and keys are handed over.
Wire fraud warning
Criminals send fake wiring instructions by email. Before you wire, call your escrow officer at a phone number you already know, never one from the email, and confirm the instructions.
Sources
- California Department of Real Estate (consumer information)
- Consumer Financial Protection Bureau: Owning a Home
- LA County Registrar-Recorder/County Clerk
Questions about a home in Los Angeles or the Valley?
Lianna Danielyan, REALTOR® · Equity Union · CA DRE #02142653 · 13400 Ventura Blvd, Sherman Oaks, CA 91423 · (818) 669-6245
Listing information is provided through Equity Union’s IDX/BoldTrail service, is deemed reliable but not guaranteed, and should be independently verified. Information on this page is general and is not legal, tax or financial advice. Equal Housing Opportunity.