Buying a home in Santa Monica should feel exciting, not overwhelming. If the word “escrow” leaves you guessing what happens next, you are not alone. You want a clear path from offer to keys, with no surprises. In this guide, you will learn how escrow works in California, what to expect on the Westside, and how to keep your purchase on track from day one. Let’s dive in.
What escrow is and why it matters
Escrow is a neutral third party that holds your funds and documents, follows written instructions from both sides, and releases money and ownership only when every contract condition is met. Think of it as your transaction’s control center. Escrow coordinates with title, your lender, and both agents to move each step forward.
In California, the process follows state real estate and disclosure laws, plus local rules where you buy. Standard California Association of Realtors forms set common timelines, though every deal is negotiated. Escrow does not offer legal or lending advice. Your agent, lender, inspectors, and title team provide those services.
Who is involved in escrow
- Escrow officer: Holds deposits, tracks paperwork, and disburses funds at closing per written instructions.
- Title company: Researches the title, clears liens, and issues title insurance.
- Buyer and listing agents: Negotiate terms, organize inspections and disclosures, and coordinate with escrow and title.
- Lender: Orders the appraisal, underwrites your loan, and funds near closing.
Escrow timeline in Santa Monica
Actual timing varies by contract and financing, but here is the common flow once your offer is accepted:
- Escrow opens and deposit sent, Day 0 to Day 3.
- Opening package, title ordered, lender engaged, Days 0 to 3.
- Inspection period and negotiations, about 7 to 17 days.
- Appraisal and loan underwriting, about 21 to 45 days depending on loan type.
- Title review and clearing, Days 7 to 30 or longer if issues arise.
- HOA document review for condos, about 3 to 10 days.
- Contingency removal and final loan approval, often by Days 21 to 45.
- Final walk-through and signing, within 0 to 3 days of closing.
- Funding, recording, and keys, about 1 to 5 business days after signing.
Typical escrow lengths in Santa Monica:
- Standard financed purchase: about 30 to 45 days.
- Cash purchase: about 7 to 21 days.
- Luxury or complex property: about 45 to 90 days or more due to jumbo loan underwriting, specialized inspections, and approvals.
Example timelines
- Typical condo with a conventional loan: Escrow opens Day 0, inspections by Day 10, appraisal ordered early and completed by about Day 17, lender clear-to-close around Day 21, closing around Days 28 to 35. This varies by contract and financing.
- Oceanfront single-family with a jumbo loan: Escrow opens Day 0, extended inspection window for specialty reports around Days 21 to 30, appraisal and complex comparable review around Days 21 to 35, underwriting and asset verification around Days 30 to 60, closing around Days 60 to 90. This varies by contract and financing.
Contingencies you should understand
Inspection contingency
You have a set period to investigate the property and either proceed, negotiate repairs or credits, or cancel within your timeline. Most buyers order a general home inspection, plus pest, roof, HVAC, sewer scope, and other specialists as needed. Luxury and coastal homes may need structural, geotechnical, flood, or seawall evaluations.
Appraisal and loan contingencies
Your appraisal contingency protects you if the appraised value comes in below the purchase price. In the luxury segment, appraisal gaps can happen when unique homes sell at a premium. Lenders base loans on appraised value, so you may renegotiate or cover a difference with cash. A loan contingency protects you if financing is not approved within the agreed time.
Title and HOA contingencies
You review the Preliminary Title Report to confirm clear ownership and address any liens or recorded items. For condos or HOA properties, you also review the CC&Rs, financials, meeting minutes, and rules within your contract window.
Santa Monica inspection checklist
Use this list to focus your due diligence, then tailor it to the specific property:
- General home inspection and pest inspection.
- Roof, HVAC, electrical, and plumbing evaluations as needed.
- Sewer lateral review and any local requirements or disclosures.
- Coastal and oceanfront items: salt air corrosion, sliding doors and hardware, seawalls or coastal structures, and flood risk.
- Bluff or hillside homes: consider geotechnical review for stability and drainage.
- Permit history: confirm past remodeling or additions with the City of Santa Monica records.
- HOA documents: CC&Rs, budgets, reserves, and rules for condos or townhomes.
Financing and deposits in practice
Earnest money deposits are set by the contract. Many buyers use 1 to 3 percent of the purchase price as a starting range. Competitive or high-end deals may use larger deposits or structured deposits at milestones. Your lender will verify assets, document the source of funds, and may require post-closing reserves.
Jumbo loans are common for multi-million-dollar homes. Expect more documentation, possible additional valuation checks, and longer underwriting. Cash purchases can move faster, yet still benefit from full escrow and title review.
Closing costs and local customs
Closing costs vary by property and contract. Here are items buyers commonly see in Southern California:
- Escrow fees, often split or negotiated.
- Title insurance: buyer typically pays the lender’s policy, while the owner’s policy is customary for the seller in many areas, but this can vary.
- Recording fees for deed and loan documents, usually a buyer cost.
- County documentary transfer tax applies at recording. Some cities add their own transfer taxes or fees. Confirm any Santa Monica city requirements before you write your offer.
- Property tax proration based on the closing date, plus local assessments.
- HOA transfer fees or reserves, if applicable.
- Lender costs such as origination and appraisal.
- Inspection costs, which buyers typically pay, while repairs are negotiated.
Practical closing logistics
- Signing: You may sign in person or remotely if your escrow and lender allow it.
- Final walk-through: Confirm the condition matches the agreement and any agreed repairs are complete.
- Funding and recording: After you sign, the lender funds the loan, escrow releases funds per instructions, and the county records the deed. Keys are released once recording is confirmed or as agreed.
- Wire safety: Always confirm wiring instructions with your escrow officer using a trusted phone number. Wire fraud scams target real estate closings, so follow security steps every time.
How to keep escrow on track
- Front-load inspections: Schedule general and specialty inspections right after opening.
- Communicate with your lender: Provide documents quickly, ask about appraisal timing, and plan for reserves.
- Track contingencies: Know your deadlines for inspections, loan, appraisal, title, and HOA review.
- Prepare for gaps: If you are buying a unique property, discuss appraisal risk and cash coverage with your agent and lender early.
- Align expectations: Longer timelines are common for luxury purchases with complex valuations or coastal due diligence.
What to expect on closing day
- Review your final figures and sign closing documents.
- Your lender funds, escrow verifies receipt, and the county records the deed.
- Once recording is confirmed, you receive keys and access per your agreement.
Buying in Santa Monica blends lifestyle and due diligence. With clear steps, realistic timelines, and the right team, you can move from offer to keys with confidence. If you are ready to explore options or want a tailored escrow plan for a specific property, connect with The Malibu Life for concierge-level guidance.
FAQs
What is escrow in a California home purchase?
- Escrow is a neutral third party that holds funds and documents, follows written instructions, and closes only when every agreed condition is met.
How much earnest money is typical in Santa Monica?
- Many buyers use 1 to 3 percent of the purchase price as a starting range, with higher or staged deposits possible in competitive or luxury deals.
How long does condo escrow usually take?
- A typical financed condo closes in about 30 to 45 days, with cash purchases often faster.
How long does escrow take for an oceanfront estate?
- Luxury oceanfront purchases often run about 45 to 90 days or more due to specialty inspections, appraisal complexity, and jumbo underwriting.
What inspections do Santa Monica buyers need near the coast?
- Common items include general and pest inspections, plus specialty reviews for salt air corrosion, sewer lines, flood or bluff risks, and any coastal structures.
What if the appraisal comes in low?
- You can try to renegotiate, cancel if protected by an appraisal contingency, or cover a shortfall with additional cash if you want to proceed.
Who chooses the escrow and title company?
- The parties negotiate the provider in the purchase agreement, and you can request your preferred escrow or title company.
How can I avoid wire fraud during closing?
- Verify wiring instructions by phone using a trusted number, and do not rely on email-only changes to wire details.
