What Happens in Escrow

Escrow is what happens just before the closing of the sale. Simply, it is when a trusted, and impartial third party (the escrow agent) makes sure that the sales transaction happens appropriately, legally, and according to the contract… and it requires a lot of paperwork.

Here’s what happens once you’re in escrow:

1. You call your lender to lock in your interest rate.

2. Do your due diligence. That is, make sure that:

  • The appraisal is done.
  • Review CCR’s and title (if you’re buying a condo or townhome).
  • Do home inspection.
  • Review termite report
  • Clearance of items.

3.  Fill in paperwork for escrow to identify you, your insurance agent, and your lender.

4.  Choose a “vesting.” Vesting is how you hold title. It specifies who is on the title of the home, whether you’re single, married, domestic partner, and whether you are taking title alone or with your spouse or partner.

5. Provide updated financial paperwork to your lender.


6. The lender sends all the paperwork from the property and updated financials for sign off.

7. Reviews estimate and ensures the funds are ready to be transferred into escrow.

8.  Sign loan docs at escrow or in the loan office or with a traveling notary.

9. Send your funds by wire transfer or cashier’s check 3 business days before the close of escrow.

10.  The lender “funds” your loan. This means that a wire for the proceeds has been sent to escrow or title.

11. Grant deed and trust deed are recorded in the county records making you officially the new owner of the property.

12. Enjoy your new home!