Escrow can feel like a black box when you are buying your first Pasadena home or relocating from out of state. You want to know who holds your money, what happens next, and when you finally get the keys. In this guide, you will learn what escrow is in California, the typical Pasadena timeline, what your earnest money and contingencies actually do, and which costs to expect at closing. Let’s dive in.
What escrow means in California
Escrow is a neutral third-party process that protects both buyer and seller during a home purchase. An escrow holder keeps funds and key documents, follows written instructions from both sides, and coordinates the steps to transfer ownership once contract conditions are met. The escrow officer prepares settlement statements, collects lender documents, and arranges recording. Changes to escrow instructions usually require mutual written agreement from buyer and seller.
If a dispute comes up over funds, the escrow holder will not take sides. The funds are typically placed on hold while the parties work it out through negotiation, mediation, arbitration, or court. This structure helps keep everyone on track and reduces risk for both sides.
Who runs escrow in Pasadena
In California, escrow is commonly handled by independent escrow companies or the escrow branch of a title company. In Pasadena and across Los Angeles County, you will often see companies like Fidelity, First American, Old Republic, or Chicago Title in this role. Your main point of contact is the escrow officer, who manages documents, deadlines, and disbursements. They coordinate with your agent, lender, and the Los Angeles County Recorder so closing is smooth and on time.
Quick escrow timeline for Pasadena
- Earnest money deposit: within 48–72 hours of acceptance
- Disclosures delivered: days 0–3
- Inspections and review: days 0–7
- Contingency windows: commonly 7–21 days (negotiated)
- Typical escrow length with financing: 30–45 days
- Typical cash closing: about 7–21 days
Step-by-step: from offer to keys
Day 0 to 3: open escrow and deposit
Once your offer is accepted, escrow opens. You will usually send your earnest money to escrow within 48 to 72 hours. The seller begins delivering required California disclosures such as the Transfer Disclosure Statement and the Natural Hazard Disclosure report. If the home is part of an HOA, expect the association documents to follow soon after.
Days 0 to 7: inspections and disclosures
Schedule your home inspection right away, along with a pest inspection and any specialists you need, such as roof, sewer, or foundation. Use this window to review disclosures and ask questions. Your agent can help you decide whether to request repairs or a credit within the inspection period. Timely communication here keeps the rest of escrow on schedule.
Days 14 to 30: appraisal and underwriting
If you are getting a loan, your lender orders the appraisal and completes underwriting. Your loan and appraisal contingencies are often tied to this stage and are commonly set between 17 and 21 days, but they are negotiable. Once you are satisfied with inspections and the lender clears conditions, you will remove contingencies according to your contract. Removing contingencies is a formal step that signals you are ready to proceed.
Final week: signing and funding
You will complete a final walk-through to confirm the property is in the expected condition. Your lender will send closing documents to escrow, and you will sign either at escrow, at the lender, or with a mobile notary. Funds are wired, and escrow prepares for recording. Always verify wiring instructions by phone using known, trusted numbers to prevent wire fraud.
Recording and keys
On closing day, escrow disburses funds and records the deed with the Los Angeles County Recorder. Keys are released according to the contract, usually on or after confirmation of recording. Congratulations, you now own a Pasadena home.
Earnest money and contingencies
Your earnest money deposit shows good faith and is held in escrow. In many California transactions, this deposit is commonly 1–3% of the purchase price, though the amount can vary with market conditions. The contract usually requires the deposit within 48 to 72 hours of offer acceptance. Whether this money is refundable depends on your contingency status and the dates in your purchase agreement.
Common buyer contingencies in Pasadena
- Loan contingency. Protects you if financing is not approved within the agreed timeframe.
- Inspection contingency. Lets you inspect the home and negotiate or cancel if major issues arise.
- Appraisal contingency. Protects you if the appraised value comes in below the purchase price.
- Title review. Gives you time to review title and address liens or defects.
- HOA document review. For condos or townhomes, you can review CC&Rs, rules, reserves, and financials.
- Sale-of-home contingency. Makes your purchase dependent on selling your current home, which some sellers view as less competitive.
Removing contingencies and your deposit
Contingencies do not expire automatically without consequence. You remove them by signing a contingency removal or giving written instructions. If you cancel while your contingency is still active and you follow the contract, your earnest money is generally refundable. If you remove contingencies and later cancel without a contractual reason, you risk losing your deposit.
Costs, title, and taxes
Escrow and title fees
Escrow fees cover administrative work, funds handling, and document preparation. Title insurance usually comes in two policies: an owner’s policy and a lender’s policy if you have a mortgage. In Southern California it is common for the seller to pay for the owner’s policy and the buyer to pay for the lender’s policy, but this is negotiable. Escrow fees are often split, though exact splits depend on the contract and local custom.
Recording fees and transfer taxes
Recording fees are paid at closing to record your deed and any mortgage documents with the county. Documentary transfer taxes can apply at the county or city level. In many Southern California transactions the seller pays transfer taxes, but responsibilities can vary by agreement. Always confirm the final allocation on your settlement statement.
Property tax proration and Proposition 13
California property taxes are prorated through escrow so each party pays their share based on the closing date. Under Proposition 13, annual increases to assessed value are capped, but a change in ownership often triggers a reassessment. After closing, you may receive a supplemental tax bill that reflects your new assessed value. Ask your agent and escrow officer to help you anticipate the timing and amount so you can budget.
Mello-Roos and local assessments
Some Pasadena areas may be part of Community Facilities Districts, often called Mello-Roos. Certain neighborhoods can also have local bonds or assessments. You will typically see these items in the Natural Hazard Disclosure and on property tax bills. Review the disclosures carefully and consider the annual cost when comparing homes.
Required California disclosures
Expect a comprehensive set of disclosures designed to keep you informed. The Transfer Disclosure Statement and the Natural Hazard Disclosure are standard. Homes built before 1978 include a lead-based paint disclosure. Termite reports are common, and HOA properties include a full association packet with CC&Rs, financials, reserves, and rules. Buyers often have a specific right to cancel after reviewing HOA documents within the timeline set in the contract.
Pasadena buyer tips for a smooth escrow
- Send earnest money promptly to avoid a technical breach.
- Order inspections right away and use your contingency window to negotiate repairs or credits.
- Read the NHD and seller disclosures closely for seismic, fire, flood, and any Mello-Roos or local assessments.
- Stay in close touch with your escrow officer and lender. Respond quickly to document requests so underwriting stays on track.
- Verify all wiring instructions by phone using trusted contact numbers. Do not rely on email alone.
- Plan for a possible supplemental property tax bill after closing.
- If a complex title issue or dispute arises, discuss next steps with your agent and consider legal counsel as needed.
How your agent supports you
A strong buyer’s agent keeps your escrow on schedule and protects your interests. Your agent coordinates with escrow, the lender, and the listing side, tracks contingency deadlines, and helps you understand disclosures before you remove protections. If you are relocating to Pasadena or moving between California and Nevada, having one point of contact who understands both markets can reduce stress and time.
When you are ready to start, connect with Stacey Elaine Sharpe for boutique, hands-on guidance backed by a trusted brokerage network. From offer to recording, you will have a clear plan, fast communication, and a confident path to the keys.
FAQs
What does escrow do in a California home purchase?
- Escrow acts as a neutral third party that holds funds and documents, follows written instructions from both sides, and coordinates closing once all conditions are met.
How long does escrow usually take in Pasadena?
- Financed purchases commonly take 30 to 45 days, while cash deals can close in roughly 7 to 21 days depending on inspections and title readiness.
When is my earnest money deposit due in Pasadena?
- Many contracts require your deposit to reach escrow within 48 to 72 hours after the seller accepts your offer, so plan your wire or delivery right away.
Are contingencies required for Pasadena buyers?
- Contingencies are optional but common, including inspection, loan, appraisal, title, and HOA review. They protect you within agreed timelines.
Who pays title and escrow fees in Los Angeles County?
- Fee splits are negotiable. It is common for sellers to pay the owner’s title policy, buyers to pay the lender’s policy, and escrow fees to be split.
What is a supplemental property tax bill after closing?
- After your purchase triggers reassessment, the county may issue a supplemental bill that reflects your new assessed value for the remainder of the tax year.
How do I avoid wire fraud during escrow?
- Always confirm wiring instructions by phone using a trusted number from your agent or escrow company. Do not rely on email-only instructions.
