Escrow is the neutral third party that holds everyone's money and documents during a real estate sale and releases them only when every condition both sides agreed to has been met. Neither the buyer nor the seller has to trust the other directly with cash or title. The escrow holder sits between them, follows the instructions in the purchase agreement, and does not act for either side.
In California, escrow is commonly handled by an independent, licensed escrow company or by a title company's escrow division. This is different from states where a real estate attorney runs the closing. Here, the escrow officer is the one who opens the file, verifies identities, holds funds, coordinates paperwork, and records the deed. The escrow officer is not your advocate. They are the mechanism that makes the transaction work without requiring either party to take the other at their word.
The timeline
Escrow opens when the signed purchase agreement and the buyer's initial deposit (often called earnest money, the good-faith deposit you put down with an offer) are delivered to the escrow holder. From that point, a clock starts.
Inside escrow, several things happen at once. The title company runs a title search, a review of the property's ownership history that confirms the seller has the right to sell and that there are no liens (debts or legal claims attached to the property). The buyer orders inspections. The lender processes the loan and orders an appraisal. Disclosures (the seller's required reports on the property's condition and any known issues) move back and forth. Contingencies (conditions written into the contract that must be met before the sale can close) are either satisfied or removed. The escrow officer tracks all of it.
Escrow closes when the deed records with the county and funds are released. For a financed purchase in California, that commonly takes around 30 to 45 days. All-cash transactions can close faster. The timeline varies, and your contract sets the target.
Who does what
The escrow officer's job is execution, not advice. They open the file, verify identities, hold the buyer's deposit and loan funds, coordinate wire instructions, order payoffs on any existing loans, collect homeowners association (HOA) documents, organize signed disclosures, prepare the settlement statement (the line-by-line accounting of every dollar in and out of the transaction), balance figures with the lender, record the deed, and release funds at closing.
What the escrow officer does not do: give legal advice, give tax advice, represent either party's interests, negotiate any term of the deal, or decide what happens next. They are neutral by design and by law.
Your agent's job during escrow is different. I track every deadline in the contract, review disclosures as they come in, coordinate with the escrow officer and lender when something stalls, and make sure a missed date or an overlooked document does not quietly put the deal at risk. The escrow officer executes. Your agent watches the whole board.
This page is general education, not legal advice. For questions specific to your transaction, consult a real estate attorney.
Who pays for escrow
Short answer: it depends on the county, and it is always negotiable. The purchase contract controls the final allocation, regardless of local custom.
That said, Bay Area counties do have longstanding customs. Title insurance is a policy that protects the buyer (and the lender) against problems in the property's ownership history, such as an undisclosed heir, a recording error, or an old lien that was missed. Title-company custom charts show who typically pays for escrow services and title insurance in each county:
- Alameda County: the buyer customarily pays escrow fees and title insurance.
- Contra Costa County: the buyer customarily pays escrow fees and title insurance.
- San Francisco County: the buyer customarily pays escrow fees and title insurance.
- Santa Clara County: the seller customarily pays escrow fees and the owner's title policy.
These are customs, not rules. Every allocation is negotiable, and the contract is what controls. For a full breakdown of what these fees actually cost, see the Bay Area closing costs guide.
Wire fraud: the real risk you need to know about
This is the section worth reading twice. Wire fraud targeting real estate closings is one of the fastest-growing financial crimes in the country, and escrow is exactly where it strikes.
The scheme works like this: a criminal monitors email traffic between the parties in a transaction (buyer, agent, lender, escrow officer) and waits for the moment when wire instructions are about to be sent. They then send a convincing, spoofed email with fraudulent wiring instructions, often from an address that looks nearly identical to the real one. If the buyer wires funds to the wrong account, the money is usually gone within hours and rarely recovered.
The scale is not small. The FBI's Internet Crime Complaint Center (IC3) reported that business email compromise, which includes real estate wire diversion, drove close to $2.8 billion in reported losses in 2024, and real estate closing wire fraud is specifically flagged in the report. The Consumer Financial Protection Bureau (CFPB) cited reports that closing phishing scams rose 1,100% between 2015 and 2017, with roughly $1 billion in real estate transaction funds lost in 2017 alone.
Here is how you protect yourself:
- Verify wire instructions by phone before you send a dollar. Call your escrow officer directly using a phone number you looked up independently, not a number from the email that contains the instructions. Ask them to confirm the wiring details verbally.
- Treat any last-minute change to wiring instructions as a red flag. If you receive an email saying the wire information has changed, stop. Do not send money. Call and verify.
- Do not email sensitive financial details. Bank account numbers and routing numbers should not travel by email.
- Identify your trusted contacts before closing. The CFPB recommends having two people you can call to confirm closing and payment instructions, established before the transaction reaches the wire stage.
I walk every client through wire verification before any funds move. It takes five minutes and it is the single most important safety step in the closing process.
Working with me
I have closed 104 documented transactions totaling more than $115 million in volume across the Bay Area. I have been California licensed since 2016 and in real estate since 2007. Of those closings, 91 have been on the buyer's side, which means I have been through the escrow process from the buyer's chair hundreds of times and know where it breaks down.
Every situation is different. If you are buying or selling and want to understand what escrow will look like for your deal, send me a message.
Lily Garipova, REALTOR®, Cal DRE #02010731.
Email: lilyagaripova@gmail.com
Phone: (415) 910-3958
Web: lilygaripova.com
Fremont, CA
FAQ
What does it mean to be "in escrow"?
It means the buyer and seller have a signed purchase agreement, the buyer's deposit has been delivered to the escrow holder, and the transaction is in progress. During this period, the escrow officer is collecting documents, coordinating with the lender, and tracking the conditions that need to be met before the sale can close. You are "in escrow" from the moment the file opens until the deed records and funds are released.
How long does escrow take in California?
For a financed purchase, commonly around 30 to 45 days. All-cash deals can close faster, sometimes in two to three weeks. The actual timeline depends on the contract, the lender's processing speed, and whether any issues come up during inspections or the title search. Your contract sets the target date, and extensions are possible if both sides agree.
Who pays escrow fees in the Bay Area?
It varies by county custom and is always negotiable. Title-company custom charts show that in Alameda, Contra Costa, and San Francisco counties, the buyer customarily pays escrow and title. In Santa Clara County, the seller customarily covers escrow and the owner's title policy. But the purchase contract controls the final allocation, and any arrangement the parties agree to overrides the custom.
Can escrow fall through?
Yes. Escrow can fall through if a contingency is not met, if the buyer's financing falls apart, if an inspection reveals a serious problem neither side can resolve, or if one party simply fails to perform. When escrow falls through, the question of what happens to the buyer's earnest-money deposit depends on the contract terms and on which contingencies were still in place at the time. It is not automatic, and the specifics matter.
How do I avoid wire fraud at closing?
Verify every set of wire instructions by phone before you send any money. Call your escrow officer at a number you looked up yourself, not one from the email containing the instructions. Never trust a last-minute change to wiring details without verbal confirmation. Do not send bank account or routing numbers by email. Establish your trusted contacts before closing day so you know exactly who to call.
