Santa Clarita Escrow Attorney Demystifies The Escrow Process

Need a better understanding of this crucial step? Our Santa Clarita Escrow Attorney demystifies the process.

Escrow is a crucial part of the process in any property transaction, but most people don’t take the time to understand it until they’re already in the middle of it. 

Then it can be confusing or stressful, especially for first-time buyers and sellers. 

Whether you’re in the middle of your fifth escrow, or you’re preparing to buy your first home, it’s important to understand the process – and how to protect yourself along the way.

An Impartial Entity

Escrow is a legal holding period during which an impartial third-party escrow company holds funds for a property transaction until all terms have been met by both parties. 

“Escrow doesn’t represent the buyer or the seller. They represent the entire transaction to make sure it’s on the up-and-up,” explained Steffanie Stelnick, Founding Partner of The Law Offices of Steffanie Stelnick. “They’re not there to defend one party or the other. They’re there to defend the escrow process, ensuring that everyone dots their t’s and crosses their i’s.”

More importantly, that means the escrow company may not be able to answer all your questions, and they definitely can’t give you advice – because they have to remain impartial. 

They are only there to facilitate and protect the exchange of funds in a property transaction. 

Learn more about the escrow process with Santa Clarita Escrow Attorney Steffanie Stelnick.

The Escrow Process

So how does escrow work? The escrow company acts as the intermediary between the buyer and seller, requesting and disbursing funds when the time is right. 

The first step of escrow involves the buyer. They’ll receive an email from escrow with wiring instructions and a request for the earnest money deposit that’s due when you purchase a property. 

Once the earnest money deposit is received, inspections begin. Buyers and sellers may go back and forth on this, until an agreement is reached between both parties. You may receive amendments or addendums to escrow during this time. 

In the final stages of closing, the buyer will receive an email from their lender, who communicates with escrow, to send over the remaining funds to purchase the property. 

If you’re an all-cash buyer, you’ll receive an email with wire instructions to send the remaining funds, which will be sent to the title company and recorded at the County Recorder’s Office.

At this point, the buyer effectively owns the property. 

However, just when you think it’s over, it’s not. 

“Escrow still has to itemize everything to make sure every penny is correct for HOA fees, the seller’s lender fees, and more,” Steffanie explained. “Once that’s done, the escrow company will disburse the funds. They’ll send wire instructions to the seller, who will pay them out for the sale of the property. If there’s excess funds, they’ll wire money back to the buyer, or send a check.” 

Finally, the process of escrow is complete.

How Long Does Escrow Take?

There’s no set time for escrow. It ranges depending on the complexity of the transaction, as well as the terms of the participating parties. 

If you’re an all-cash buyer or investor, for example, you can have a quick escrow in just 5-7 days. On the other hand, you can have a 60-day escrow, especially if you have tenants who deserve a 60-day notice of termination. 

“This really depends on what works best for both parties involved,” Steffanie explained. “I’ve dealt with all kinds of escrow periods, including a seller who needed to sit in escrow for 2 years in order to avoid paying capital gains. Escrow can be however long you want, as the buyers and sellers.”

How We Can Help 

If you have any questions about your escrow contracts, addendums or instructions, we urge you to please contact our office. Our experienced attorneys can go over those escrow instructions with you and answer any questions you might have. 

“Again, your escrow company may not be able to answer all your questions because, as an impartial third-party, they cannot give you advice. You have to bring your questions and concerns to a real estate attorney or agent,” Steffanie explained. “But if you want someone to review your escrow documents, explain your potential liability, and lay out the ramifications of your transaction – it’s best to come see us. Our consultations are free.”

We are here to help. Schedule your complimentary case evaluation today, and our Santa Clarita escrow attorney will answer all your questions, walk you through the process and review all your documents – prior to the biggest transaction of your life.

About The Law Offices of Steffanie Stelnick 

The Law Offices of Steffanie Stelnick is a full-service civil litigation law firm in California that focuses on real estate law, with cases in estate planning, probate, landlord and tenant disputes and contract disputes. Mrs. Steffanie Stelnick represents builders, small and large property management companies, investors, brokers and all types of real property owners. In 2020, she was recognized by the American Institute of Trial Lawyers as Litigator of the Year. Mrs. Stelnick believes all landlords and tenants should know their rights, and when it comes to representation, experience matters. The Law Offices of Steffanie Stelnick has handled thousands of real estate cases with a strong, aggressive approach that ensures all clients operate on an even playing field in a litigation environment. Founded in the Santa Clarita Valley, this premiere real estate law firm has offices throughout the state of California, including Encino, San Francisco and Sacramento.