Are you excited about buying in Pasadena but unsure what “escrow” actually does? You are not alone. Escrow can feel opaque when you first hear about deposits, title reports, and recording. In this guide, you will learn what escrow is, how the timeline works in California, what it costs, and how to avoid common delays so you can move from offer to keys with confidence. Let’s dive in.
What escrow means in California
Escrow is a neutral third-party process that holds money and documents and follows the written instructions in your purchase contract. The escrow holder coordinates with your lender, the seller, the title company, and the county recorder. They only release funds and record the deed when all conditions are met. This structure helps protect both sides and creates a clear, enforceable checklist for closing.
Who holds your money in Pasadena
In Pasadena and Los Angeles County, escrow is commonly handled by independent escrow companies or title companies that also issue title insurance. Your earnest money deposit and closing funds are placed into a trust account. Escrow companies are regulated at the state level, and title insurance is regulated by the California Department of Insurance. The goal is neutrality and clear procedures that reduce risk for everyone.
Escrow timeline: offer to keys
Every deal is unique, but most Pasadena transactions follow a similar flow from acceptance to recording. You will see key milestones like opening escrow, inspections, loan approval, and final signing. The exact dates are negotiated in your contract and confirmed by your escrow officer and agent.
Opening escrow (day 0–3)
- You and the seller sign the purchase agreement.
- You send your earnest money deposit to the named escrow holder.
- Escrow opens the file, issues an escrow number, and orders a title search and preliminary title report.
Early contingencies and disclosures (first 1–3 weeks)
- The seller provides required California disclosures, including the Transfer Disclosure Statement and Natural Hazard Disclosure. Lead disclosure applies to pre-1978 homes.
- You complete your contingency investigations, which often include general home, pest/termite, roof, HVAC, sewer scope, and title review.
- If you are financing, your lender orders an appraisal and advances underwriting.
Mid-escrow (weeks 2–4+)
- You negotiate repairs or credits after reviewing inspection results.
- Your lender processes loan conditions and appraised value.
- Title works through any liens or items that must be cleared before closing.
Final steps: signing, funding, recording
- You sign loan and closing documents, and the seller signs the deed.
- Your lender funds the loan, and escrow confirms receipt of good funds.
- The Los Angeles County Recorder records the deed. After recording and disbursement, you receive keys.
How long escrow takes in Pasadena
All-cash purchases can close quickly, often in 3 to 14 days if title is clear and documents are ready. Financed purchases commonly take 30 to 45 days, though 21 to 30 days can be possible in competitive conditions. Delays usually come from underwriting, appraisal issues, title clearance, repairs, HOA approvals, or contract changes.
What you will pay through escrow
Escrow collects and disburses money based on written instructions. Expect the following items to appear on your settlement statements.
- Escrow fees. Buyer and seller often split escrow fees in California, but this is negotiable and may follow local custom.
- Title insurance. Owner’s and lender’s policies are issued at closing. In much of Los Angeles County, it is traditional for the seller to pay the owner’s policy and the buyer to pay the lender’s policy. These items are negotiable and should match your contract.
- Transfer taxes and recording fees. County and sometimes city charges apply and are calculated by sale price and local rules. Confirm current rates with the City of Pasadena and the Los Angeles County Recorder.
- Prorations. Property taxes, HOA dues, and other prepaid items are prorated as of the closing date. California property taxes are based on assessed value plus local assessments; escrow calculates the exact proration.
- Other costs. Lender fees, HOA document fees, pest work if paid at closing, optional home warranty, and real estate commissions per the contract.
Funds for closing must be good funds, usually by wire or cashier’s check. Most escrows will not accept personal checks for final closing funds.
Contingencies that protect you
Contingencies give you time to investigate and, if needed, cancel within the agreed window.
- Inspection contingency. Lets you inspect and negotiate repairs or credits.
- Loan contingency. Protects you if your lender does not approve the loan on time.
- Appraisal contingency. Covers cases when appraised value is below the price. You can negotiate, bring extra funds, or cancel if allowed by your contract.
- Title contingency. Allows review of the preliminary title report to confirm clear ownership and acceptable exceptions.
Typical lengths vary. You might see 10 to 21 days for inspections and 17 to 30 days for loan or appraisal, but all timelines are negotiable in your contract.
Common roadblocks and how to avoid them
- Title issues. Old liens, judgments, or missing prior signatures can take time to clear. Start title review early and respond quickly to requests.
- Appraisal gaps. If value comes in low, discuss options: price adjustment, extra buyer funds, or cancellation if permitted.
- Repair disputes. Clarify scope and deadlines for any seller work or credit.
- HOA document issues. Budget time to review financials and rules if you are buying a condo or in an HOA.
- Lender delays. Send requested documents promptly and keep employment and assets stable during underwriting.
- Funding and payoff errors. Confirm final numbers with escrow before wiring funds.
Escrow instructions are binding. If a dispute arises, escrow may hold funds until both sides agree in writing or a formal resolution is reached. Holdbacks can be used to cover unresolved repairs after closing when both parties agree.
Pasadena buyer checklist
Use this simple list to stay ahead of deadlines and reduce stress.
- Get a full mortgage pre-approval and share property details with your lender quickly.
- Prepare your ID and proof of funds for your deposit and closing.
- Confirm the escrow and title company that will handle your file.
- Book inspections right after escrow opens: general home, pest/termite, sewer scope for older homes, and roof if needed.
- Review all seller disclosures and the preliminary title report promptly.
- Track lender requests and reply fast to keep underwriting on schedule.
- Arrange homeowner’s insurance to start on the closing date.
- Verify wiring instructions by phone using a known, independently verified escrow number.
Sample 30-day timeline
Below is a simple example. Your actual contract dates control.
- Day 0: Offer accepted. Deposit sent to escrow.
- Day 1–3: Escrow opens, title ordered, seller disclosures delivered.
- Day 3–14: Inspections completed. Repairs or credits negotiated.
- Day 7–21: Lender processes loan and orders appraisal.
- Day 17–30: Contingencies removed as resolved.
- 3 days before closing: Final walk-through scheduled.
- Closing day: You sign, lender funds, deed records, keys released.
Safe wiring: protect your funds
Wire fraud is a real risk. Criminals can spoof emails and send fake wiring instructions. Always call your escrow officer at a known phone number, not one in an email, to confirm routing and account details before sending money. Never rely on email alone to verify wiring instructions.
Clear communication with your team
Ask your agent for a short timeline with key dates. Request weekly updates that cover deposit status, inspections, appraisal, loan conditions, and title items. Confirm signing logistics early and keep your phone handy on funding day in case escrow or your lender needs a quick response.
Ready to move in Pasadena?
You deserve a smooth, well-communicated path from offer to keys. If you want steady guidance, clear timelines, and practical escrow problem solving tailored to Pasadena, connect with Eric Kang. Let’s make your escrow feel calm, organized, and predictable.
FAQs
Who holds my Pasadena escrow deposit and is it refundable?
- Your earnest money is held in an escrow trust account. Refundability depends on your contract and contingency timelines; if you cancel within a valid contingency period, your deposit is typically returned per the written instructions.
What inspections are standard for Pasadena homes and condos?
- Common inspections include general home, pest/termite, roof, HVAC, and a sewer scope for older homes. You usually order and pay for these during the inspection contingency.
How long does escrow typically take for a financed Pasadena purchase?
- Financed transactions commonly take 30 to 45 days, though 21 to 30 days can happen in competitive situations if everyone moves quickly.
Who usually pays for title insurance and escrow fees in Los Angeles County?
- It is common for the seller to pay the owner’s title policy and for the buyer to pay the lender’s policy, and for escrow fees to be split, but these items are negotiable and should match your contract.
What happens on closing day in California escrow?
- You sign final documents, your lender funds the loan, escrow verifies good funds, and the county records the deed. After recording and disbursement, you receive keys.
How do I avoid wire fraud when sending escrow funds?
- Always confirm wiring instructions by calling your escrow officer using a known, independently verified phone number. Do not rely on email alone for wire details.
What if the appraisal comes in low during Pasadena escrow?
- You can negotiate a price change, bring additional funds, or cancel if your contract allows under the appraisal contingency.
What if my lender denies the loan late in escrow?
- If you have an active loan contingency, you may be able to cancel and recover your deposit per the contract. If contingencies are removed, your options are more limited, so timing matters.
