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California Real Estate Escrow Period


By law, escrow and title insurance are not required when transferring ownership to real property, however, they are extremely important.

In California, when ownership transfers from one person to another there is usually a neutral third party, called an escrow agent, handling the details of the sale. Further, the purchase agreement is a binding contract that becomes the escrow instructions.

There are ten (10) main clauses included in your escrow instructions as follows:

1. The purchase price: the amount of consideration the buyer and seller have agreed upon for the property sale.

2. Terms: The parties agree on how the property will be purchased. This includes cash, a loan, a trust deed, trade or any other special agreement. This section will also discuss the down payment amount.

3. Vesting: The way that title will be taken is referred to as vesting. The buyer may take the title in sole ownership, joint tenancy, as tenants in common with another, etc. The way the buyer will take title is important for understanding applicable tax or inheritance considerations.

4. Recorded matters: The parties may agree upon recorded matters affecting the property such as an easement, trust deed or even an existing street bond. An agreement may be made on a recorded encumbrance affecting title at the time of sale.

5. Closing: The parties will agree how long they want the escrow period to last, mentioning the specific length in the escrow instructions.

6. Inspections: The parties will agree whether they will conduct specific inspections of the property before the close of escrow. For example, the parties may agree on a pest control inspection, plumbing inspection, or electrical inspection. The buyer's approval may be included as a contingency.

7. Prorations: Example of items that are prorated are rental deposits, income, taxes, or insurance premiums.

8. Possession: The parties will agree on when the buyer may take possession of the house. The close of escrow could also be the date of move in.

9. Documents: The grant deed and trust deed must be prepared, signed and delivered.

10. Disbursements: All other clauses in the escrow instructions must be settled according to the instructions.

Do you have questions regarding your escrow documents? If so, please contact Aziz Legal by phone at (408) 203-4627 or email us at

This article is merely informational and is not intended to be used as legal advice. Use of any information from this article is for general information only and does not represent personal legal or tax advice, either express or implied. Readers are encouraged to consult Aziz Legal, or another attorney, for any specific legal matters.

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