Escrow Fees in California - Who Pays?

Before answering the question of who pays escrow fees in California, let's first discuss what it is and how it benefits people who are making a large purchase. In a nutshell, an escrow is a service similar to that of a holding tank or security box.

The escrow company is a third-party contractor that holds the buyer's payment but only releases it to the seller if and when all obligations are fulfilled. Since escrow companies represent neither party, the transaction is overseen and executed in the fairest possible manner.

Who Pays For It?

Now we come to the main part - who pays escrow fees in the state of California? During the agreement stage of the transaction, both parties involved will usually negotiate who pays escrow fees as well as any conditions either party has that needs to be fulfilled by the other. Either the buyer or seller pays for escrow, or sometimes both of them share the cost of the escrow fee. It depends on the county in California you are purchasing property in. In most California counties, the buyer and seller split the escrow fees. However, some counties specify which party pays the escrow fees:

Counties where Buyer pays Escrow Fees: Counties where Seller pays Escrow Fees:
   - Alameda    - Sacramento
   - Contra Costa    - San Benito
   - Lake    - Santa Clara
   - Marin    - Yolo (exception: in the city of Davis, California, the buyer pays)
   - Mendocino  
   - Napa  
   - San Francisco  
   - San Mateo  
   - Solano  
   - Sonoma  


In situations where the asset being traded is rejected or the transaction is cancelled following acquisition of funds, the buyer is held accountable for paying the escrow fees and any other related costs, such as shipping and return shipping.

Closing Costs

Escrow Fees and Closing Costs in CaliforniaThe costs you pay for using an escrow service are small compared to the added security and legitimacy it brings to the transaction. In every escrow transaction, a closing cost is usually charged to either party. The closing cost is exactly what it sounds like - the fees for closing a real estate transaction. At this point, the title to the property is transferred to the buyer.

In some situations, funds may be continuously held back in escrow after the ownership of a property or asset is transferred to its new owner. An example of this would be if you were to find something wrong with the property at the very last minute. The seller agrees to cover the repairs needed, but the project could not be finished before the final day of transaction. The money may be held back in escrow to pay for the repairs.

How Does It Close?

Once both parties have completed all the paperwork and all payments have been verified, the escrow agent will disburse the funds to the seller and the property deed or asset title to the buyer. To make the transaction official, the escrow agent will also record the paperwork with the county and state so the new property ownership is recognized by governing bodies.

Both parties will also get their copy of the final closing statement through mail. Once received, make sure to check the contents of the statement for its accuracy. If any errors are identified, contact the closing agent immediately. If no errors are found, safely store the statement along with other vital paperwork.

Knowing who to hire as your escrow agent is as important as knowing who pays for the fees associated with the service. This guide provides all the information you need to know about escrow payments. Do your homework to find the most reliable and experienced escrow agency in California.

Sterling West

Sterling West Escrow is committed to providing the highest standards of quality, efficiency, and reliability. We care about our customers, and recognize that the buying and selling of property is an important affair to all parties involved. Our ability to earn your trust is what sets us apart from other escrow companies. We offer competitive rates without compromising the supreme level of customer service and precise attention to detail that is required for your transaction. To find out how Sterling West Escrow can benefit you in your next large financial transaction in the greater Los Angeles area, contact us today.