Escrow

How escrow works

Once a buyer and seller agree on a purchase price, neither side hands money or the deed directly to the other. Instead, both sides deposit funds, signed documents, and instructions with a licensed, neutral escrow company. The escrow officer holds everything and only releases it once every condition in the purchase agreement -- financing approved, inspections cleared, disclosures delivered -- has been met.

In California, escrow typically runs 30 to 45 days for a financed purchase, though it can close faster for cash buyers. During that window, the buyer's earnest money deposit sits in escrow rather than going to the seller directly.

What happens if the deal falls through

Whether a buyer's deposit is refunded depends on why the deal collapsed and which contingencies were still active. If a buyer cancels within an active inspection contingency or loan contingency period, the deposit is typically returned. Canceling outside of an active contingency puts the deposit at greater risk of going to the seller instead.

Escrow and your flat fee agent

Under a flat fee buyer representation agreement, Roman coordinates directly with the escrow officer on your behalf -- confirming contingency deadlines, reviewing the closing disclosure, and making sure the closing cost credit from your flat fee arrangement is correctly reflected on the final settlement statement before you sign.