How Escrow Works in Sacramento

Buying in East Sacramento and wondering what escrow actually does? You are not alone. Escrow can feel mysterious the first time you see timelines, deposits, and disclosures stacked into a tight schedule. This guide breaks down how escrow works here in Sacramento County so you know what to expect, how to protect your deposit, and how to keep your closing on track. Let’s dive in.

What escrow means in California

Escrow is a neutral process run by a third party that holds your funds, coordinates documents, and makes sure every contract condition is met before the deed records and money changes hands. In California, the escrow company and title company often work closely together, but they have distinct roles.

Why escrow exists

Escrow protects you and the seller. Your earnest money sits in a secure trust account while the title company researches the property, your lender finalizes the loan (if applicable), and everyone signs the required documents. Nothing funds or records until all conditions are satisfied and both sides agree in writing.

Who regulates it and why it matters

California escrow companies operate under state escrow law and oversight by the California Department of Financial Protection and Innovation. Real estate licensees are regulated by the California Department of Real Estate, and title insurance falls under the state insurance code. Knowing this helps you understand why procedures are standardized and why your escrow officer follows strict instructions.

Who does what in a Sacramento escrow

You will interact with several professionals. Each has a clear job.

Your agent team

• Buyer’s agent: Advises on offer terms, deposit amounts, and contingency lengths. Coordinates inspections, lender updates, and your final walkthrough.
• Seller’s agent: Manages offers, provides disclosures, and works with escrow to open the file and keep timelines visible to everyone.

Escrow and title partners

• Escrow officer/company: Opens escrow, holds the earnest money, prepares closing statements, coordinates signing and funding, and releases funds after recording.
• Title officer/company: Searches title, issues a preliminary title report, clears liens or defects when possible, and delivers owner’s and lender’s title insurance at closing. For examples of local fee estimates and service scope, you can review major providers like First American Title, Fidelity National Title, or Chicago Title.
• Lender: Orders your appraisal, processes and underwrites your loan, and sends loan documents to escrow when you are clear to close.

Typical East Sacramento timeline

Local financed escrows often run 30 to 45 days from acceptance to recording. Cash purchases can be as quick as 7 to 21 days, depending on title clearance. In competitive East Sacramento situations, buyers sometimes tighten these timelines to strengthen their offer.

Milestones at a glance

• Day 0: Offer accepted and escrow instructions initiated within 24 to 72 hours.
• Days 0–3: Earnest money deposit delivered to escrow by check or wire per instructions.
• Days 3–10: Inspections begin. Many California Association of REALTORS (CAR) forms reference a 17‑day inspection period, but this is negotiable. See general contract guidance at the California Association of REALTORS.
• Days 7–21: Lender orders appraisal; you receive the preliminary title report for review.
• By your contingency deadlines: You either remove contingencies in writing or cancel under the contract if needed.
• Days 21–35: Lender clears conditions; escrow prepares your closing package.
• Final walkthrough: Often 24 to 72 hours before closing.
• Closing: Funds are sent, deed records with Sacramento County, and keys release after recording.

Exact dates will be spelled out in your signed purchase agreement and escrow instructions.

Deposits and contingencies

Earnest money basics

Your earnest money shows good faith and is held in escrow until closing. The contract sets when it is due, often within 24 to 72 hours of acceptance. Amounts vary by price and market conditions. In California, it is common to see a few thousand dollars up to 1 to 3 percent in stronger offers. During active contingency periods, your deposit is typically refundable if you cancel under the contract. After you remove contingencies, it may become non‑refundable if you back out without a contract right.

Main contingencies to expect

• Inspection: Gives you time to inspect the home and request repairs or credits. Length is negotiable, though 7 to 17 days is common in many local offers.
• Loan: Protects you if your loan cannot be approved or funded in time. Coordinate removal carefully with your lender’s green light.
• Appraisal: Often tied to the loan. If the appraisal is below the price, you can negotiate, bring extra funds, or cancel by the deadline set in your contract.
• Title: Lets you review the preliminary title report. Any unacceptable exceptions should be resolved before you remove this contingency.
• HOA/CC&R review: If the property is in an association, you will receive documents and have a set review window.
• Sale‑of‑home: Less common in competitive pockets of East Sacramento because it can extend timelines.

Seller disclosures you will receive

California sellers provide statutory disclosures like the Transfer Disclosure Statement (TDS), Natural Hazard Disclosure (NHD), and other required notices. Review them promptly. Delivery of disclosures can affect your contingency rights. CAR provides general guidance on statewide forms at the California Association of REALTORS.

Inspections and local notes

Common inspections

General home, roof, and pest inspections are typical in Sacramento. Sewer lateral scopes are also common so you can understand the condition of the line and any possible local requirements. Order specialty inspections early so you have time to review results and negotiate within your contingency window.

Risk management tips

• Calendar your contingency removal dates on day one.
• Send any notices or requests in writing through your agent and escrow.
• Keep lender documents moving quickly to prevent loan delays.
• If you plan repairs with the seller, define the scope, who completes the work, and how completion will be verified before closing.

Closing day and costs

What happens at funding

You will sign your closing documents with escrow or the lender. Once final lender conditions are cleared, funds are sent to escrow. Escrow then directs title to record the deed and deed of trust with the county. After recording, title policies are issued and escrow releases funds to the appropriate parties. Keys are delivered when the transfer is confirmed.

Who typically pays what

• Buyer costs: Lender fees, lender’s title insurance policy if you are financing, recording fees, a share of escrow fees, and prepaid items like interest and insurance.
• Seller costs: Owner’s title insurance policy in most California transactions, real estate commissions, loan payoffs, documentary transfer tax if applicable, and a share of escrow fees if agreed.
• Prorations: Property taxes, HOA dues, and utilities are prorated as of the recording or possession date.

Local taxes and recording fees can vary. For current recording processes and fee information, check the Sacramento County Recorder. Your escrow or title officer will confirm customary allocations and exact amounts for your transaction.

Avoid delays and protect your funds

Common delays and fixes

• Loan or appraisal delays: Get pre‑approved early, deliver documents promptly, and order the appraisal quickly after acceptance.
• Title issues: Open escrow promptly so the title search starts early. Address liens, judgments, or payoffs as soon as they surface.
• Disclosure or repair disputes: Ask for disclosures as early as possible and schedule inspections right away. Keep negotiations focused and documented.

For local norms, your agent can draw on guidance from the Sacramento Association of REALTORS and your chosen escrow and title team.

Wire fraud protection

Wire instructions will come from escrow on a secure platform. Always call your escrow officer at a known, independently verified phone number before sending funds. Do not rely on emailed instructions alone, and do not click unknown links. If something seems off, stop and verify.

Quick buyer checklist

• Get a strong pre‑approval and discuss realistic contingency timelines with your agent.
• Decide on a competitive yet comfortable earnest money amount.
• Confirm escrow contact details and deposit delivery steps on day one.
• Order general, roof, pest, and any specialty inspections right away.
• Review the preliminary title report and ask questions about exceptions.
• Clarify closing funds, wiring procedures, and key‑release timing with escrow.
• Confirm which transfer taxes and fees apply with your title or escrow officer. You can also reference the Sacramento County Recorder for recording information.

Work with a local guide

Escrow runs smoothly when you set clear timelines, understand your rights, and keep every document moving. If you want a calm, step‑by‑step plan tailored to East Sacramento and central Sacramento neighborhoods, we are here to help you prepare, compete, and close with confidence. Connect with Pierre Daniel Viard for a neighborhood consultation and a customized escrow roadmap.

FAQs

What is escrow in a California home purchase?

• Escrow is a neutral third party that holds your deposit, coordinates documents, and ensures all contract conditions are met before funds release and the deed records.

How long does escrow take in Sacramento?

• Financed purchases typically take 30 to 45 days from acceptance to recording, while cash deals can be 7 to 21 days depending on title clearance and logistics.

How much earnest money should I plan for?

• Amounts vary by price and market conditions, but you will often see deposits ranging from a few thousand dollars to about 1 to 3 percent in stronger offers.

When do I deliver my deposit to escrow?

• The purchase contract sets the timing, commonly within 24 to 72 hours after offer acceptance; escrow will provide delivery options and instructions.

What are the main contingencies to know?

• Inspection, loan, appraisal, title, and any HOA review are the big ones; timelines are negotiable and should align with your lender and inspection schedule.

Who pays for title insurance and escrow fees?

• In many California transactions, the seller pays for the owner’s policy and the buyer pays for the lender’s policy, while escrow fees are often split, though everything is negotiable.

When do I get the keys to my new home?

• Keys are typically released after funds have cleared and the deed has recorded with Sacramento County on closing day.

How can I avoid wire fraud when sending funds?

• Confirm wiring instructions by calling your escrow officer at a known phone number, use secure portals, and never rely on unsolicited emails or links.