How Escrow Works In Sacramento Home Sales

Buying or selling a home in Sacramento and wondering what happens after your offer is accepted? Escrow is where the details get organized, funds are protected, and the deal comes together. If you understand how escrow works here in Sacramento County, you can avoid delays, keep your deposit safe, and close with confidence. This guide walks you through local timelines, costs, and practical steps so you know exactly what to expect. Let’s dive in.

What escrow is and why it matters

Escrow is a neutral third party that holds funds and documents until both sides complete their agreed steps. The escrow holder follows written instructions from you, the other party, and your lender.

In California, escrow companies are regulated at the state level, and title insurance companies are overseen by the California Department of Insurance. For financed purchases, federal consumer protections apply to your loan disclosures. This oversight helps keep the process secure and transparent.

Escrow also coordinates required California seller disclosures. You will see documents like the Transfer Disclosure Statement and the Natural Hazard Disclosure delivered and acknowledged through escrow. These connect directly to buyer contingencies and timelines.

Sacramento escrow timeline, step by step

While every contract is unique, here is the typical flow you can expect in Sacramento:

1) Offer accepted and escrow opened

• Escrow opens a file, assigns an escrow number, and provides deposit instructions.
• You receive an initial estimated settlement statement that outlines projected costs.

2) Earnest money deposit

• The buyer deposits earnest money into escrow according to the purchase contract.
• The contract sets the rules for when the deposit is refundable or forfeited.

3) Title search and preliminary report

• The title company searches public records for liens, easements, or other issues.
• A preliminary title report identifies items that must be cleared or insured over before closing.

4) Contingencies, inspections, and underwriting

• Buyers typically complete inspections and review disclosures during set contingency windows.
• The lender orders an appraisal and processes underwriting. Federal disclosure rules apply for financed loans.
• If a contingency is not met by its deadline, the contract usually allows the buyer to cancel per its terms.

5) Clear to close and signing

• Once contingencies are removed and the lender issues clear to close, escrow prepares the final figures.
• You review and sign documents. Escrow collects any remaining funds and confirms lender wiring details.

6) Funding, recording, keys

• The lender funds the loan. Escrow records the deed and deed of trust with the Sacramento County Recorder.
• After recording confirms, escrow disburses funds and the buyer receives keys as the contract specifies.

Typical timelines

• Financed sales often take about 30 to 45 days, depending on loan type and contingencies.
• Cash purchases can close faster, sometimes in 7 to 14 days if title is clear and documents are ready.
• Common contingency windows range from about 10 to 21 days, but your contract sets the actual dates.

Sacramento County specifics to know

Recording and transfer taxes

• Deeds and deeds of trust are recorded at the Sacramento County Recorder’s Office. Escrow manages the submission and pays recording fees at closing.
• County and, in some cases, city documentary transfer taxes may apply. Who pays is often set by local custom or negotiated in the contract. Escrow verifies amounts and collects them if required.

Property taxes and prorations

• Escrow prorates county property taxes and any special assessments, including Mello-Roos, through the closing date so each party pays its share of the tax period.
• Assessed value changes and exemptions are handled through the assessor’s office outside of escrow, but escrow uses assessor data for accurate prorations.

HOA documents and timelines

• For homes in an HOA, escrow coordinates delivery of HOA governing documents and required resale disclosures. California law and HOA rules set timelines for delivery and the buyer’s right to cancel after receiving them.

Local considerations

• Properties near waterways, levees, or in flood-prone areas may require additional disclosures or special underwriting steps. Escrow and your agent keep these items on the radar so they do not slow your closing.

Costs and who typically pays

Your final settlement statement will itemize every cost. Common categories include:

• Title and escrow fees, including title search, title insurance, and the escrow fee for handling the closing.
• Lender and loan costs, such as origination, underwriting, appraisal, and the lender’s title policy.
• County recording fees and any documentary transfer taxes.
• Prorations for property taxes, HOA dues, and utilities.
• Inspection and repair charges, plus items like home warranty, courier, and notary.

Who pays what varies by contract and local practice. In many California markets, sellers often pay the owner’s title insurance policy and sometimes the documentary transfer tax, while buyers typically cover loan-related fees and the lender’s title policy. Escrow fee splits can be 50/50 or negotiated differently. Always confirm your specific allocation in the purchase agreement and escrow instructions. Escrow will not change payers without written agreement from both sides.

Title insurance basics

Two policies are common: an owner’s policy that protects the buyer and a lender’s policy that protects the lender. If the preliminary title report shows a lien or judgment, it must be cleared or insured over before the lender will fund.

Estimates and final figures

Early in the process, escrow provides an estimated settlement statement. Final figures, including payoffs and prorations, are confirmed just before signing. Review them carefully and ask questions if something looks off. A quick double-check can save time on closing day.

Avoid delays and reduce risk

Smooth closings are built on timely documents, proactive communication, and security best practices. Here is how you can help keep things on track.

Buyer checklist

• Bring valid photo ID to signing.
• Provide funds for down payment and closing costs as instructed by escrow.
• Secure your homeowner’s insurance binder early and share it with escrow and your lender.
• Respond quickly to lender and escrow requests, and keep your financing documents current.

Seller checklist

• Bring valid photo ID to signing.
• Request payoff statements for any existing loans and liens.
• Gather HOA documents, resale certificates, and any required HOA payoff details.
• Coordinate keys, remotes, and access codes for transfer after recording.

For both parties

• Verify wiring instructions by calling your known escrow officer at a verified phone number before sending any funds. Be alert for spoofed emails. This simple call is one of the best protections against wire fraud.
• Track contingency deadlines and communicate any extensions in writing through your agent.
• Review the final settlement statement carefully before your signing appointment.

Common escrow issues and solutions

• Title defects or liens discovered: Title works to clear them or provides insurance coverage where appropriate. Unresolved items can delay funding.
• Financing falls through: If the buyer cannot obtain approval within the loan contingency period, the contract determines whether escrow is cancelled and what happens to the deposit.
• Missing or late documents: Insurance binders, HOA documents, or payoff statements can hold up recording. Escrow coordinates follow-up and may arrange extensions when both parties agree.
• Deposit disputes: Escrow follows written instructions. If parties disagree, resolution typically comes through mutual agreement, mediation or arbitration, or a court order.

Close with confidence

Escrow can feel complex, but with clear steps, strong communication, and a proactive plan, you can move from acceptance to recording without surprises. If you want a calm, organized path to closing in Sacramento, reach out for tailored guidance, detailed timelines, and hands-on support from offer through recording.

Ready to talk through your next move? Schedule a private consultation with Unknown Company to plan your path to a smooth closing.

FAQs

Who holds the earnest money in Sacramento escrow?

• The escrow company holds your earnest money and disburses it only according to the signed escrow instructions and your purchase contract.

When do buyers get keys in Sacramento County?

• You generally receive keys after the loan funds and the deed records with the Sacramento County Recorder, with timing set by your purchase contract.

Can escrow close with unresolved title issues?

• Usually not; liens or defects typically must be cleared or insured over before the lender will fund and escrow can close.

What if closing is delayed after signing?

• Escrow may hold signed documents until funding arrives; your agent can arrange a written extension so recording and possession timelines remain clear.

How long does escrow usually take in Sacramento?

• Many financed sales close in about 30 to 45 days, while clear cash transactions can close in roughly 7 to 14 days, depending on title and documents.