Frequently Asked Questions

Escrow - What Is It?

Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law - Section 17003 of the Financial Code - provides the legal definition.

Why Do I Need Escrow?

Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow company has an obligation to safeguard the funds and/or documents while those funds and documents are in their possession, and to disburse funds, and/or convey title only when all provisions of the escrow have been complied with.

Who Chooses The Escrow?

The selection of the escrow company is normally done by agreement between the principals (buyer, seller, lender, borrower). If a real estate professional is involved in the transaction, they may recommend an escrow company. However, it is the right of the principals (buyer, seller, lender, borrower) to use a competent escrow company that is experienced in handling the type of escrow at hand.

What Do I Have To Do While In Escrow?

  1. Read and understand your escrow instructions. If you do not understand them, you should ask your Escrow Officer to explain the instructions. Your Escrow Officer will not give you legal advice, or advise you as to whether or not you have a "good deal." The Escrow Officer is there to follow the instructions given by the principals in the escrow.
  2. Ask your Escrow Officer what you can do specifically to assist. Ask the question, "What can I do to expedite the closing of this escrow?"
  3. Respond quickly to correspondence. 
  4. If you are required to deliver funds into the escrow, check with your Escrow Officer to confirm our wire instructions and procedures we have in place for your security. 
  5. Be sure to let your Escrow Officer know of any special needs or rush requirements as soon as possible. Upon closing, packages are prepared within 24-48 hours of recording. Items such as closing papers, checks, title policies, statements, etc. cannot be processed on the day of the closing; they may take several days. If you have a special need, for example a check on the day of closing, you should communicate that need to the Escrow Officer early in the processing of the escrow.

what if i have a New Loan?

If you are obtaining a new loan, your Escrow Officer will be in touch with the lender who will need copies of the escrow instructions, the Preliminary Report, and any other documents escrow could supply. Your Escrow Officer will coordinate with your lender the receipt of your loan documents, schedule the loan signing appointment, and assist with any funding/closing conditions that relate to escrow. If you have special scheduling needs for your loan signing, it is best you inform your Escrow Officer as soon as possible.

What Fees And Costs Will Be Charged?

Escrow companies will charge fees that commensurate with the costs of producing the service, the liability undertaken, and the overhead expenses which include a profit factor. Escrow fees are not regulated by the state, therefore, the fees will vary between companies and from county to county. In addition, escrow companies do not have control over the costs of other services that are obtained, such as the title insurance policy, the lender's charges, insurance, recording charges, etc.

To get a breakdown of our costs and fees please call us at (858) 560-4781 or email us at

What Is A Closing Statement?

A closing statement is a written accounting document prepared at the close of escrow. Your closing statement will be provided in your closing package with a breakdown of the purchase price, the funds deposited or credited to your account, payoffs on existing encumbrances and/or liens, the costs for all services, and a determination of the funds due to you at the close of the escrow. 

Please be sure to examine your closing papers thoroughly and look for a refund check. If there is a check, be sure to endorse and deposit it immediately. Additional fees will be charged for a duplicate check to be issued. 

Your closing statement and all other escrow papers should be kept virtually forever for income tax purposes. Your accountant will need information about the sale or purchase of the property. Additionally, the IRS and other agencies may require you to prove your costs and/or profit on the sale of any property. The Escrow Holder is only required to maintain records for five years and fees may be charged by your escrow company for for the retrieval of a file from storage.

What About Cancellations?

No escrow is opened with the intention that it will cancel, but there are occasions when a contingency cannot be met or when parties disagree during the escrow. Some Escrow Holders prepare for such an event by incorporating cancellation instructions in the typed or printed General Provisions. 

Do expect to be charged a cancellation fee, as this is a charge for professional services rendered and often for several "out of pocket" expenses that have been incurred on the client's behalf. These fees can vary from company to company depending upon their policies. Please be aware that funds will not be released until signed mutual instructions have been received from all parties. 

If a dispute exists, an Interpleader Action may be necessary. This is when the escrow company may be forced to have a court to decide which party is entitled to documents or funds. Fortunately, most disputes are resolved before the Interpleader is filed, as the costs for such legal actions are extreme. Those costs are normally paid out of the funds on deposit in the escrow.

What About Title Insurance?

Title insurance insures the owner and/or the lender of ownership or lien priority of the property. There are various types of coverage, but a basic policy insures that the buyer is the owner and that any lender shown on the policy is an "insured" lender. Many different types of extended coverage are available; for example, an ALTA policy is quite often required by the institutional lenders to afford them additional protection under the title insurance policy. The title policy is written after extensive examination of public records and after the recording of the required documents in the escrow.

The title insurance policy fee is a one-time fee, paid at the close of escrow. The determination of who pays for the policy differs from county to county in California. In almost every case, the agreement between parties is what determines payment of closing costs. 

What About Property Taxes?

The terms of your transaction and the escrow instructions determine how property taxes will be handled. If your escrow calls for a proration of taxes, there will be an item in your closing statement that will reflect either a credit or charge to your account. If the taxes are not paid (even though there has been a credit or charge against your account), the buyer is obligated to obtain a tax bill and pay the taxes. If the buyer does not have a tax bill with which to pay the taxes, you can request a bill from the County Tax Collector by providing a photocopy of the deed.

Supplemental Property Taxes is another concern of the buyer. Upon transfer of real property, a supplemental tax bill is generated. This is accomplished in cooperation with the County Assessor and the County Tax Collector.

Shortly after the close of an escrow involving the conveyance of real property, the County Assessor will request information about the property from the buyer. This information assists the Assessor in determining the value of the property for taxation purposes. Some of the information may have previously been supplied by the Escrow Holder at the time of the closing of the escrow, via a Preliminary Change of Ownership form that should accompany each deed when it is recorded.

The Perfect Escrow - Does It Exist?

No two escrows are the same and perfection can be difficult to achieve when dealing with the complexities of escrow. Sometimes desires of the parties and other matters are beyond the Escrow Officer's control. However, your Escrow Officer has the background, training, education, support, and systems in place necessary in order to accomplish the objectives of the escrow instructions.

In the event you have any problems in the handling of your escrow, you should first contact the Escrow Officer. If your problem is not resolved, you should next contact the management or owner of the company. If the matter requires additional attention, you can call the proper regulatory agency. There are a number of different regulatory agencies governing the escrow operations in California.  Elite Escrow Services of San Diego is governed by the California Department of Business Oversight.