Buying a home in Atwater is exciting, but the word “escrow” can make the process feel mysterious. You want to protect your deposit, hit your deadlines, and get your keys on time. In this guide, you’ll learn what escrow is in California, how the timeline usually works in Merced County, what it costs, and how to stay safe from common pitfalls. Let’s dive in.
What escrow means in California
Escrow is a neutral process that holds money, documents, and instructions until every condition in your purchase agreement is met. The escrow company follows written instructions from you, the seller, your lender, and both agents, then releases funds and records the deed when everything is complete.
Escrow is not the same as title. Escrow handles funds and instructions. The title company researches the property’s ownership and issues title insurance policies. In California, many firms provide both services under one roof.
Who is on your escrow team
- You, the buyer: deposit funds, complete inspections, get your loan, and sign closing documents.
- Seller: provides required disclosures, signs transfer documents, and conveys title.
- Real estate agents: coordinate timelines, inspections, and negotiation details so you stay on track.
- Escrow officer: neutral coordinator who holds money, prepares settlement statements, and disburses funds.
- Title company: reviews public records and issues title insurance.
- Lender: underwrites your mortgage, orders the appraisal, and sends loan funds to close.
- Inspectors: general home inspection plus specialists like pest, roof, HVAC, or septic as needed.
- Appraiser: independent valuation for the lender.
- HOA manager (if applicable): provides resale documents and fee details.
- County Recorder/Assessor: records the deed and updates tax records after closing.
Your Atwater escrow timeline
Every contract is unique, but most financed purchases in California close in about 30 to 45 days. Cash deals can move faster. Here is a simple step list you can use to plan. Timings are common estimates, not guarantees.
- Open escrow (days 0 to 3)
- Escrow receives the signed purchase agreement.
- You wire your earnest money deposit per escrow’s verified instructions.
- Title search and prelim report (days 1 to 7)
- Title reviews public records for liens, easements, and exceptions.
- You and your agent review the preliminary title report.
- Seller disclosures delivered (days 1 to 7)
- You receive required California disclosures, including the Transfer Disclosure Statement and Natural Hazard Disclosure. If the home was built before 1978, you will also receive a lead-based paint disclosure.
- Inspection and due diligence (about 7 to 17 days, negotiated)
- Schedule a general home inspection and a pest or wood destroying organism inspection. Add specialists if needed, such as roof, HVAC, sewer, or septic.
- Loan, appraisal, and underwriting (about 14 to 45 days)
- Your lender orders the appraisal and processes your file.
- Appraisal timing and underwriting often drive the closing pace.
- Contingency removals and negotiations (during inspection and appraisal periods)
- You can request repairs or credits. If agreed, escrow updates instructions.
- Final loan approval and clear to close (around days 20 to 45)
- Lender issues final conditions and closing figures.
- Under federal rules, lenders must provide a Closing Disclosure at least 3 business days before you sign. You can learn more about this timing from the CFPB’s Closing Disclosure guide.
- Signing, funding, and recording (about 1 to 3 days)
- You sign your loan documents.
- Your lender wires loan funds and escrow sends the deed for recording.
- Once recorded by the county, you are the new owner and can receive keys.
What it costs to close
Buyer closing costs in California usually range around 2 to 5 percent of the purchase price. This is a general estimate and depends on your loan type, price point, and how fees are split in your contract.
Common buyer costs include:
- Earnest money deposit. Credited to your down payment or closing costs.
- Lender fees. Application, underwriting, and credit report charges vary by lender and loan program.
- Appraisal fee. Often several hundred dollars, amount varies by property and location.
- Title insurance. Buyers typically pay the lender’s policy, while sellers often pay the owner’s policy in California. This is negotiable.
- Escrow fees. Charged for the closing process. Split per local custom or negotiation.
- Recording fees. County charges to record the deed and deed of trust.
- Prorations. Your share of property taxes, HOA dues, and utilities from the day you take title.
- Homeowners insurance. Your first year premium is due at closing or collected in reserves.
- Prepaids and reserves. Lenders often collect initial tax and insurance reserves for your impound account.
- HOA items. If the property is in an HOA, expect transfer and document fees.
- Optional items. Home warranty, notary, or specialty inspections.
Illustrative example only: On a $400,000 purchase, buyer closing costs could run about $8,000 to $20,000. Your numbers will vary based on your lender, property, and negotiated terms.
Documents and disclosures you will see
- Transfer Disclosure Statement. The seller’s property condition disclosures under California law.
- Natural Hazard Disclosure. Tells you if the home sits in mapped hazard zones, like flood or wildfire areas.
- Lead-based paint disclosure. Required for homes built before 1978.
- Preliminary Title Report. Lists liens, easements, and recorded matters affecting the property.
- Escrow instructions and wiring instructions. Verify any wiring instructions directly with your escrow officer using a trusted phone number.
- Closing Disclosure and settlement statement. Your lender must provide a Closing Disclosure at least 3 business days before you sign final loan docs. The escrow settlement statement shows final debits and credits.
For consumer resources on California real estate practices and licensing, visit the California Department of Real Estate. For information about standard California forms and processes, see the California Association of Realtors. If you plan a pest inspection or need clearance, the California Structural Pest Control Board provides state guidance.
Local tips for Atwater and Merced County
- Property taxes. California’s base property tax is about 1 percent of assessed value, plus local assessments. Check the exact levies and any special assessments for the specific parcel with the Merced County Assessor.
- Documentary transfer taxes. City and county transfer tax rules vary in California. Confirm whether they apply to your Atwater purchase with the Merced County Recorder.
- Utilities and systems. In some areas, properties may use septic systems or private utilities. Confirm service providers and any required inspections or permits during your contingency period.
- HOA details. If your Atwater home is in an HOA, ask for CC&Rs, budgets, meeting minutes, and any special assessment notices early.
- County resources. Start with the Merced County official website to locate Assessor and Recorder offices for fee schedules and recording timelines.
Stay safe from wire fraud
Wire fraud is a real risk. Protect yourself with a few simple steps:
- Always call your escrow officer using a known phone number to verify wiring instructions. Do not trust phone numbers in email attachments.
- Confirm the account name and routing details before sending funds.
- Never send a wire based on last minute emailed changes. Re-verify by phone with your escrow officer.
- After sending a wire, confirm receipt with escrow the same day.
When to contact whom
- Contact your real estate agent when you receive seller disclosures, need to interpret inspection results, want to request repairs or credits, see unusual title items, or need strategy after a low appraisal.
- Contact your escrow officer for wiring instructions, deposit verification, payoffs, and prorations.
- Contact your lender for document requests, loan conditions, insurance changes, or timing questions.
- Contact an attorney or tax advisor for complex title issues, estates, unusual contract language, or tax questions.
Quick Spanish glossary: escrow basics
- Escrow: fideicomiso / escrow
- Closing or Close of Escrow: cierre
- Earnest money deposit: depósito de buena fe
- Title insurance: seguro de título
- Lender’s title policy: póliza del prestamista
- Owner’s title policy: póliza del propietario
- Inspection: inspección de la vivienda
- Appraisal: tasación
- Contingency: condición
- Preliminary Title Report: reporte preliminar de título
- Natural Hazard Disclosure: declaración de riesgos naturales
- Transfer Disclosure Statement: declaración de divulgación del vendedor
- Recording: inscripción o registro
- Prorations: prorrateos
- HOA: Asociación de propietarios
- Wire fraud: fraude por transferencia electrónica
Ready for your next step?
If you want local guidance through each step, from offer to recording, you are in the right place. As a Merced native and full-time REALTOR, I simplify escrow, keep you on timeline, and help you close with confidence in Atwater and across the county. Reach out to Martin Villanueva to Schedule a Free Consultation.
FAQs
How long does escrow take for an Atwater home purchase?
- Financed purchases commonly take about 30 to 45 days from contract to recording, while cash deals can close faster, often in 7 to 14 days, depending on inspections, appraisal, and lender timelines.
What is the 3-day Closing Disclosure rule?
- Lenders must deliver your Closing Disclosure at least 3 business days before you sign final loan documents, as explained by the CFPB.
How much earnest money do buyers usually deposit?
- The deposit amount is negotiable, but many California purchases use 1 to 3 percent of the price, credited to your down payment or closing costs at closing.
Who pays for title insurance in California?
- It varies by contract and local custom. Buyers typically pay for the lender’s policy, and sellers often pay for the owner’s policy in California, but it is negotiable.
Are property taxes prorated at closing in Merced County?
- Yes. Property taxes, HOA dues, and certain utilities are prorated so you pay your share starting from the day your deed records with the county.
Do I still need a home inspection if there is an appraisal?
- Yes. The appraisal supports the lender’s valuation, while inspections evaluate the home’s condition. Buyers usually complete general and pest inspections, plus specialists as needed.
