Understanding the requirements for depositing closing funds into Escrow is critical to avoiding costly delays at the end of a real estate purchase.

California State law requires that all funds be cleared before Escrow can authorize recording of the closing documents. As such, the following 3 types of deposits are not acceptable.

  • Money orders, as stop payments can be placed after issuance. 
  • Cash, as the Escrow company is not a bank and has no way to secure large sums of cash.
  • Foreign currency, as the Escrow company cannot be responsible for exchange rate.

Most escrow companies follow these guidelines for acceptable deposits:

Closing deposit less than $500k:

  • Payment may be made in the form of a Cashier’s or Official Check drawn on a California Bank or Savings & Loan.
  • You can wire the funds. Your Escrow officer will provide you with proper wiring instructions. Wired funds are not subject to the clearance procedures that can delay a closing. This form of deposit is by far the most efficient for all parties involved in the transaction.
  • Funds must be on deposit 24 hours before Escrow can authorize recording of the documents to close escrow.
  • If funds are not received in this form, your closing could be delayed between 1-10 days or longer while the escrow company confirms that the funds are “good” or cleared.

Closing deposit $500k or more:

Funds MUST be deposited by wire transfer. 

Talk to your Escrow officer if you have questions about your final deposit or any other matter concerning your Escrow.

Have more questions about buying a home in California? Join our Facebook Group: Professional Real Estate Advice for California Home Buyers & Sellers or reach out via email at hello@inhaus.io

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