Buying or selling in Santa Monica comes with a lot of moving parts, and escrow can feel like the most mysterious. You want a smooth, on-time close with no surprises and no costly mistakes. In this guide, you’ll learn exactly how escrow works here on the Westside, what steps to expect, and how to keep your deal on track from offer to recording. Let’s dive in.
What escrow means in California
Escrow is a neutral third party that holds funds and documents and releases them only when everyone’s agreed conditions are met. In California, an escrow company or the escrow division of a title company typically performs this role. Your escrow officer coordinates with you, your agent, the lender, and title so the transfer of ownership can record with the county.
Escrow closes when the deed and any mortgage documents record at the Los Angeles County Recorder. At that point, funds are disbursed, loans are paid off, and the transfer becomes part of the public record.
Who does what in your Santa Monica escrow
- Buyer: completes inspections, removes contingencies, secures financing, signs loan and closing documents, and brings in final funds.
- Seller: provides required disclosures, completes agreed repairs, and signs the deed and closing paperwork.
- Agents: negotiate contract terms, open escrow, coordinate inspections and repairs, and keep timelines on track.
- Escrow officer: prepares escrow instructions, coordinates title search, requests loan payoffs, produces the closing statement, collects funds, obtains signatures, and orders recording.
- Title company: searches and clears title issues and issues title insurance.
- Lender: orders the appraisal, underwrites and funds the loan after conditions are met.
- County Recorder: records the deed and related documents at closing.
Santa Monica escrow timeline at a glance
Every deal is unique, but most purchases in Santa Monica close within 30 to 60 days after acceptance. All-cash or pre-underwritten buyers can close faster, while complex sales or condos with slow HOA responses can push timelines longer.
Milestone checklist and typical windows
- Offer accepted and escrow opened (Day 0)
- Deposit delivered per contract, often within 1 to 3 business days.
- Escrow opens and assigns your file number.
- Title search ordered (Days 0 to 3)
- Title prepares a preliminary report identifying liens, easements, or exceptions.
- Inspection period (commonly 7 to 17 to 30 days, negotiated)
- General home inspection and specialty inspections as needed: pest, roof, sewer, foundation, mold, HVAC.
- You may request repairs or credits. Seller responds per the contract.
- Loan process and appraisal (often 21 to 45 days)
- Lender orders an appraisal and reviews documentation while underwriting your loan.
- HOA document review for condos and co-ops
- Seller or HOA provides governing documents, financials, reserve studies, and meeting minutes.
- Title clearance and closing statement (Days 20 to 40)
- Escrow gathers payoff demands, taxes, and prepares the settlement figures.
- Contingency removals and signing
- Contingencies are removed in writing by deadline. You and the seller sign final loan and escrow documents.
- Final walkthrough typically occurs 1 to 3 days before closing.
- Funding, recording, and disbursement (Day 30 to 60 typical)
- Lender funds, escrow records the deed and any mortgage, then disburses funds.
- Post-closing
- Title issues final title insurance policies. Tax forms and reporting are completed as required.
Deposits and how they work
Your earnest money shows good faith and is credited to you at closing. A common baseline in many markets is around 1 to 3 percent of the purchase price, though in competitive Westside situations some buyers choose larger deposits or non-refundable structures to compete. Your purchase agreement defines the exact amount and the timing.
Deposits are usually made by wire transfer or cashier’s check. Always verify wire instructions by calling your escrow officer at a known phone number before sending funds. Wire fraud attempts do occur, so a quick verification protects you.
Contingencies you will negotiate
Contingencies protect you while you complete due diligence and secure financing. Timelines are negotiated and must be removed in writing.
- Inspection: time to inspect and request repairs or cancel per the contract.
- Loan: protection if financing cannot be obtained within the agreed period.
- Appraisal: options if the appraisal comes in below the purchase price.
- Title: review and approval of the property’s title condition.
- HOA/Condo docs: review of association documents for financials, reserves, litigation, and rules.
- Sale of current home: less common in competitive markets but sometimes used.
Shortening or waiving contingencies can strengthen an offer but increases risk. Your agent can help you balance speed and protection.
Required disclosures in California
Sellers in California provide several key disclosures that are central to escrow. These include the Transfer Disclosure Statement, Natural Hazard Disclosure, and the lead-based paint disclosure for homes built before 1978. Local and utility disclosures may also apply based on the property and location.
If disclosures are incomplete or late, closing can be delayed. Review them early so you can ask questions, request documentation, or adjust timelines as needed.
Local Santa Monica issues to consider
- Coastal and bluff considerations: Properties near the beach or bluffs may involve coastal commission or historical considerations and special disclosures. Confirm permitting history if you plan renovations.
- Seismic risk: Earthquake-related hazards appear in the Natural Hazard Disclosure. Earthquake insurance is separate and is typically purchased by the buyer if desired.
- Rental rules: Santa Monica has specific regulations for rentals and short-term rentals. If you are buying an income property, review local rules early in escrow.
- Historic districts and permits: Landmark status or local designations can affect remodel approvals and timelines.
- Utilities and stormwater: Some jurisdictions require property-specific compliance or certifications. Confirm any requirements with the city early in the process.
- HOA and condos: Many Santa Monica properties are in associations. HOA financials, reserves, and litigation history can affect both your decision and your lender’s review.
Title, title insurance, and recording
The title company searches for liens, easements, and other exceptions that could affect ownership. Two policies are common: a lender’s title policy that protects your lender and an owner’s title policy that protects your equity. Owner’s coverage is optional but commonly purchased.
At closing, escrow instructs the County Recorder to record the deed and any mortgage. Once recording confirms, escrow disburses funds and title issues final policies.
Closing costs and who typically pays
Expect a mix of lender fees, escrow and title fees, recording and transfer taxes, and prorations for property taxes and HOA dues. In Southern California, many items are negotiable and shaped by local custom. The lender’s title policy is typically paid by the buyer, while the owner’s policy and escrow fees are negotiated.
Your purchase agreement controls the allocation, and your escrow officer will provide exact figures in your closing statement.
How to keep escrow on track
- Get pre-underwritten if financing. It can shorten timelines and reduce surprises.
- Order inspections quickly. Reserve popular inspectors early, especially in fast markets.
- Respond to lender conditions fast. Delays often stem from missing documents.
- Review HOA documents promptly. Ask for budgets, reserves, meeting minutes, and any litigation updates.
- Verify wire instructions by phone. Use a known phone number for your escrow officer.
- Keep contingency dates front and center. Removals must be in writing and on time.
Your step-by-step buyer checklist
- Open escrow and deliver deposit within the contract window.
- Book general and specialty inspections during your contingency period.
- Review disclosures, NHD, permits, and any coastal or historic considerations.
- For condos and co-ops, review HOA financials, reserves, rules, and litigation.
- Track loan milestones: appraisal ordered, conditions cleared, loan docs scheduled.
- Approve the preliminary title report or request clarifications.
- Sign loan and escrow documents, complete final walkthrough, wire final funds.
- Confirm recording and receive closing package and keys.
A smoother close in Santa Monica
Escrow is designed to protect both sides and ensure a clean transfer of ownership. When you understand each step, you can set realistic timelines, negotiate smart contingency windows, and avoid last-minute stress. If you are planning a purchase or sale in Santa Monica, thoughtful preparation and proactive communication with your team will make all the difference.
Ready to map out your path to closing with a local expert by your side? Schedule a private consultation with Shelton Wilder to talk timelines, contingencies, and a personalized strategy for your Santa Monica move.
FAQs
What is escrow in a California home purchase?
- Escrow is a neutral third party that holds funds and documents and releases them only after all contract conditions are met, ending with recording at the county.
How long does escrow take in Santa Monica?
- Typical purchases close in 30 to 60 days. All-cash or pre-underwritten buyers can close faster, while HOA or loan delays can extend timelines.
How much is the earnest money deposit?
- A common baseline in many markets is around 1 to 3 percent of the price, but the exact amount and timing are negotiated in the purchase agreement.
Which contingencies should I include?
- Common contingencies are inspection, loan, appraisal, title, and HOA review. Timelines are negotiated and must be removed in writing by deadline.
Who pays which closing costs in Santa Monica?
- Many costs are negotiable. Buyers often pay the lender’s title policy, while the owner’s policy and escrow fees are allocated by local custom and contract.
What can delay escrow in Santa Monica?
- Common issues are appraisal shortfalls, HOA document delays, title liens, undisclosed defects, and lender underwriting conditions that take time to clear.
Do I need owner’s title insurance as a buyer?
- It is optional but commonly purchased because it protects your ownership interest from certain title defects not found in the search.
How do I avoid wire fraud during escrow?
- Always confirm wiring instructions by calling your escrow officer at a known number. Never rely on emailed instructions alone.
