Surviving the escrow process

Surviving the escrow process

  • The CREM Group
  • 06/5/20

INTRODUCTION: Don’t Be Put Off by the Paperwork

When a person says, “my house is in escrow,” heads around them nod happily. The term ‘escrow’ is used so frequently in the buying and selling of homes and real property of any kind that people think they know what it is. It isn’t straightforward, and largely involves lots of paperwork. In this journal entry, our intent is to give a quick overview of the process, the pitfalls, and the pertinent facts that will help you understand the process without getting too bogged down. Oh, here’s the other one, “My house fell out of escrow.” All the heads in the circle shake, lips pursed in shared disappointment. The proper reply is, “Oh, I’m so sorry.”

We throw the term escrow around, think we know what it means, and hope we are getting a fair shake when the escrow company sets a pile of papers in front of us and says, “please read and sign.” They point to several places, our eyes glaze over as if someone has swabbed our eyeglasses with Vaseline, pretend to read for a while, and we nod, then straighten and sign authoritatively, maybe with a flourish. That’s actually not a good idea.

Don’t be in a rush! Because these papers disclose interest rates, prepayment penalties, loan terms and fees, and other important parameters, you should take the time to read the fine print without feeling rushed by the notary, escrow officer, loan broker, and whoever else is present at the loan meeting. Read everything over and fully understand any documents first, because your personal care and due diligence could have a direct impact on the results of the deal.

Let’s break it down.

What is Escrow?

Our handy probate-terms dictionary (which you can find here) defines escrow as this: Escrow is ”Money or documents, such as a deed or title, held by a third party until the conditions of an agreement are met. For instance, pending the completion of a real estate transaction, the deed to the property will be held ‘in escrow.’

It sounds simple enough, but the California Department of Real Estate wants to make sure homebuyers are aware of the laws governing home sales transactions, and escrow is an unavoidable part of the process, for which probate, trust, and conservatorship homes are no different from “normal” homes. They all still must go through escrow.

“Surviving the Real Estate Escrow Process in California” is a 32-page document authored in 2010, and laws could have changed, but the basics are the same. We share some highlights, and invite you to visit the site itself for more details. And be sure to check with your real estate agent for recent updates.

Why Escrow?

The process of escrow is intended, in large part, to protect both buyers and sellers. It should prevent the buyer from having nasty surprises and it assures that the seller really does receive the money they’re due for their property. Without escrow, the problems associated with real estate transfers would rise markedly as mistakes always add time, and the cost for handling them has to come out of someone’s pocket. Reducing errors is a good reason for escrow, and why we at the CREM Group are adamant about dealing with the best probate escrow agents and lenders.

The Language of Escrow

“Opening escrow” – Once you and the seller agree on a price and sign a mutually acceptable purchase agreement, the CREM Group, if we were your real estate agent, would collect your earnest money, which can ultimately be applied to your down payment. That money is deposited in an escrow account at an escrow company or service specified through the purchase agreement.


This means that the real estate documents, funds, or other things of value are placed with a neutral third party (the escrow agent).


This means the transaction cannot be completed for one reason or another. One such reason is if the buyer fails to qualify for the necessary loan. Another might be that the inspection of the home or property reveals something that wasn’t foreseen when the purchase contract was drawn. We at the CREM Group do our level best to make sure this does not happen.


When an escrow has “closed,” it means that all the conditions of the escrow have been fulfilled, the loan has funded (when transactions involve new financing), documents have been recorded, and the property and the funds have changed hands legally.

What Does an Escrow Agent Need?

  • Correct spelling of your name(s) and your current contact information
  • Contact data for the lender (e.g., mortgage broker) if you’re seeking new financing
  • Mortgage loan account records (lender or loan servicer’s name, address, and your account number there) if you are selling or refinancing a piece of property; plus any other, mortgage, tax bond or other lien evidence
  • Proof of fire insurance with policy number, amounts, etc.
  • Title vesting selection
  • Copies of your trust documents if you’re taking title in a trust or selling from a trust
  • Homeowner Association (HOA) and management contact information if applicable; copies of HOA documents, any relevant partnership or LLC papers, or corporate documents if taking title in the name of or selling from one of those entities

Escrow is Not a Black Hole

Documents that go into escrow must come out in a timely fashion. Such things as title reports, termite reports, information request forms, and other pieces of information must be turned around quickly for the escrow to close in a timely fashion. We help our clients understand that the sooner the paperwork is completed, the more quickly they can buy or sell their properties. One of our services at the CREM Group is to keep the transactions moving along. And as both of us owners of the CREM Group are attorneys as well as probate real estate agents / probate real estate brokers, we have a leg up to give our clients help during the escrow process.

Surviving the Escrow Process

As with any legal undertaking, there are bound to be terms and instances you do not understand at first. After you have bought and sold a probate or regular house or two, the idea of escrow will not be so intimidating. As long time real estate agents for all kinds of properties in Los Angeles and Orange Counties, we have made sure we support our clients so they “survive” escrow. Bottom line, don’t be put off by the paperwork. Escrow is for your safety as a buyer or a seller.

As always, contact us by email here if you have any questions about real estate, probate real estate, trust real estate, conservatorship real estate, including but not limited to buying probate real estate, especially in Los Angeles and Orange Counties in California (currently expanding to Riverside and San Diego).

Or directly:

Mark Cianciulli, Esq.
[email protected]

DISCLAIMER: This content is meant purely for educational purposes. It contains only general information about real estate and legal matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.

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