Buying a home in Sacramento is exciting, but the escrow process can feel like a black box. You might wonder who holds your money, what happens day to day, and when you finally get the keys. You deserve a clear, calm path from accepted offer to move‑in. In this guide, you’ll learn how escrow works in California, what’s typical in Sacramento County, and the exact steps to keep your purchase on track. Let’s dive in.
What escrow is
Escrow is a neutral process where a licensed escrow or title company holds funds and documents, follows the purchase contract, and closes only when all conditions are met. In California, title companies often provide both escrow and title services. Your escrow officer coordinates with your lender, the title department, and both agents to ensure the deed records and funds are disbursed correctly.
Why it matters in Sacramento
Local customs affect timing and costs. Sacramento County’s recording practices and transfer taxes, plus city‑level rules, can change how quickly your deed records and what you pay. Typical financed escrows in Sacramento run about 30 days, sometimes 45 days. Cash deals or waived contingencies can close in as little as 7 to 14 days.
Escrow timeline
Every contract is unique, but most Sacramento transactions follow a similar flow. Always confirm deadlines in your signed purchase agreement.
Day 0: Offer accepted
You and the seller sign the purchase agreement. It sets contingency timelines and the target closing date.
Days 1 to 2: Open escrow
Your agent submits the agreement and opens escrow with a chosen company. You receive an escrow number and initial instructions.
Days 1 to 3: Earnest money deposit
You deliver your earnest money to escrow per the contract. In many California markets, it is often 1 to 3 percent of the price, but it varies by deal. Escrow issues a receipt and holds your funds securely.
Days 1 to 21: Inspections and title work
- You schedule inspections within your inspection period. Many buyers choose general home, pest or termite, roof, and sometimes sewer scope.
- The title team issues a preliminary title report and starts clearing any liens or encumbrances.
- If there is an HOA, the seller or HOA provides governing documents and financials for your review. These can take 10 to 15 days and sometimes delay closing if not ordered early.
Appraisal and underwriting
Your lender orders the appraisal. Underwriting reviews your file, appraisal, and title. Final approval, also called clear‑to‑close, often comes a few days after the appraisal is in and conditions are met.
Final walkthrough
About 1 to 3 days before closing, you confirm the property is in agreed condition and that any negotiated repairs are complete.
Signing and funding
You sign loan and closing documents with escrow or a mobile notary. You wire your remaining funds for the down payment and closing costs using the escrow officer’s written instructions.
Recording and keys
The lender wires loan funds to escrow. Escrow records the deed with the Sacramento County Recorder, then disburses funds. Keys are usually released after confirmation of recording, or as your contract instructs. During high‑volume periods, allow an extra business day for recordation.
Parties and money
Understanding who does what keeps your escrow smooth.
Who does what
- Buyer: Provides ID and funds, completes loan steps, orders insurance, signs closing documents.
- Seller: Provides disclosures, completes agreed repairs, signs the deed, and delivers HOA documents if applicable.
- Escrow officer: Coordinates documents, holds and disburses funds, prepares settlement statements, and manages closing.
- Title company: Searches and clears title issues, then issues title insurance policies.
- Lender: Orders appraisal, underwrites the loan, and wires loan funds at closing.
- Real estate agents: Track deadlines, negotiate repairs or credits, and help resolve issues.
Key documents you will see
- Purchase agreement
- Earnest money receipt
- Preliminary title report
- Loan documents and Closing Disclosure
- Deed to be recorded
- Seller disclosures and any HOA documents
Money flow and wire safety
- You deposit earnest money into escrow.
- You pay inspection and appraisal fees during escrow.
- The lender wires loan proceeds to escrow at funding.
- You wire the remaining down payment and closing costs.
- Escrow pays off the seller’s loan, closing costs, commissions, and then records the deed.
- Escrow releases any remaining funds to the seller and confirms keys per the contract.
Wire fraud attempts target real estate closings. Always verify wiring instructions by calling the escrow officer at a phone number you obtain independently. Do not rely on emailed numbers or links.
Contingencies you control
Contingencies protect you while you verify the property and your financing.
Inspection contingency
You can inspect the home and request repairs or credits. If major issues arise and cannot be resolved, you can cancel within the deadline in your contract.
Appraisal and loan contingencies
If the appraisal comes in below the purchase price, you can negotiate with the seller or cancel within your contingency period. The loan contingency allows cancellation if financing falls through by no fault of your own and within the agreed timeline.
Title and HOA review
If the title report shows problems that cannot be cured, you can cancel within the title contingency. For properties in an HOA, review the documents and financials carefully. If you discover unresolvable issues during the review period, you can cancel per the contract.
Local practices to know
A few Sacramento customs can shape your closing.
Typical length
Thirty days is common for financed purchases. Some deals use a 45‑day timeline to allow for HOA documents or complex underwriting. Cash offers and simplified contingencies can close in 7 to 14 days if title is clear.
Fees and who pays
Who pays escrow and title fees is negotiated and varies by area. In many California markets, sellers often pay for the owner’s title policy, but this is not universal. Confirm the split of fees in your executed contract and settlement statement.
Recording and taxes
Sacramento County charges recording fees, and documentary transfer taxes may apply. Some cities within the county have their own rules. Your escrow officer can confirm exact amounts and timing before closing.
Avoid common delays
Stay ahead of these common Sacramento escrow issues.
- Appraisal shortfalls: Discuss strategies with your agent in case value comes in low.
- Title issues: Review your preliminary title report early and ask questions right away.
- HOA document delays: For condos or planned developments, request the HOA package as soon as escrow opens.
- Loan conditions: Respond quickly to lender requests and keep your financial profile stable during escrow.
- Wire verification: Call your escrow officer to confirm instructions before sending any funds.
Buyer checklist
Use this simple list to keep your escrow moving.
Before you write offers
- Get a strong pre‑approval letter from a local lender.
- Decide on your earnest money amount and keep funds accessible.
When escrow opens
- Deliver your earnest money within the contract timeline.
- Schedule inspections right away.
- Provide ID and any requested documents to escrow and your lender.
- Order homeowner’s insurance to begin at closing.
During escrow
- Review the preliminary title report promptly.
- For HOA properties, review the documents upon delivery and ask follow‑up questions.
- Track deadlines for inspection, loan, and appraisal contingencies.
Signing to recording
- Review your Closing Disclosure at least three business days before signing.
- Verify wiring instructions by phone with escrow.
- Complete your final walkthrough and confirm repairs.
After closing
- Keep your recorded deed and settlement statement for tax and mortgage records.
Next steps
Every purchase is different. Your timelines, fees, and risk points depend on the property, financing, and whether an HOA is involved. If you want a personalized escrow roadmap, a cost outline, and local timing expectations for Sacramento County, reach out for a calm, well‑managed plan from offer to keys.
Ready to map your path to closing? Request a complimentary market consultation with Darya Ghomeshi.
FAQs
What is escrow when buying a home in Sacramento?
- Escrow is a neutral third party that holds funds and documents, follows your contract instructions, and closes only when all conditions are satisfied, then records your deed.
How long does escrow usually take in Sacramento County?
- Financed purchases commonly take about 30 days, sometimes 45 days, while cash or simplified deals can close in 7 to 14 days if title is clear.
How much earnest money do buyers typically deposit?
- Many California transactions use 1 to 3 percent of the purchase price, but the exact amount is negotiated and set in your contract.
When do I get my keys after closing in Sacramento?
- Keys usually release after confirmation of recording with the Sacramento County Recorder, or as instructed in your purchase contract.
What happens if the appraisal is lower than the price?
- You can try to renegotiate price or terms, bring extra funds, or cancel if your appraisal contingency allows within the deadline.
Who pays for escrow and title fees in Sacramento?
- It is negotiated. In many California markets sellers often pay the owner’s title policy, but customs vary by area and are not universal.
How can I avoid wire fraud during escrow?
- Always call your escrow officer at a verified phone number to confirm wiring instructions, and never rely on email or text details alone.
What documents will I sign before closing?
- You will review and sign your loan package, the Closing Disclosure, escrow instructions, and the deed, along with any required disclosures and HOA documents if applicable.