How Escrow Works in South Pasadena

Heard the word “escrow” and wondered what actually happens between “offer accepted” and “keys in hand” in South Pasadena? You are not alone. The process can feel technical, especially with older homes and local rules in the mix. In this guide, you will learn how escrow works here, what it costs, how long it usually takes, and how to avoid common hiccups. Let’s dive in.

Escrow basics in California

Escrow is a neutral, third‑party process that holds funds and documents while everyone completes the contract steps, then coordinates funding, recording, and final disbursements. In California, an escrow officer manages the logistics and a title company issues the title report and title insurance. Often, the same company handles both.

Customs matter. In Southern California, sellers commonly pay for the owner’s title insurance policy, and buyers pay for the lender’s policy when there is a mortgage. Escrow officers are neutral and do not provide legal advice. Most residential closings use standard California Association of Realtors forms, which set common timelines for inspections, loan, and appraisal contingencies.

California also requires robust disclosures early in escrow. You will see a Transfer Disclosure Statement, a Natural Hazard Disclosure, plus any required lead-based paint disclosure for homes built before 1978, among others. Buyers use these to guide inspections and contingency decisions.

South Pasadena escrow timeline

Escrow length depends on financing, contingencies, and negotiation. Typical ranges in the Los Angeles area are:

• All-cash deals: 7 to 21 days
• Financed deals: 30 to 45 days, with 30 days common
• Complex or contingency-heavy deals: 45 days or longer

Step-by-step flow

1. Offer accepted and open escrow (Day 0)

• Your agent opens escrow and you receive an escrow number.
• The buyer deposits earnest money, usually within 1 to 3 business days.

2. Early disclosures and title order (Days 0 to 3)

• Seller delivers required disclosures like TDS and NHD.
• Title opens and prepares a preliminary title report.

3. Inspection and contingency period (about 10 to 17 days)

• Buyer schedules inspections and reviews disclosures and title exceptions.
• If financing, the appraisal is ordered, often scheduled within 1 to 3 weeks.

4. Loan underwriting and appraisal review (overlapping)

• The lender processes the file, requests conditions, and reviews the appraisal.
• The buyer removes the loan contingency when the lender commits.

5. Title clearance and payoffs (last 7 to 10 days)

• Title clears any liens or judgments.
• Seller obtains payoff figures for mortgages and other obligations.

6. Final walkthrough and contingency removal (1 to 3 days before close)

• Buyer confirms the home’s condition matches the contract.

7. Signing, funding, and recording (closing day)

• Parties sign with escrow. Funds are wired in.
• Escrow records the deed and loan. Title insurance policies are issued.

8. Post-recording disbursements (within a few days)

• Escrow pays off liens, commissions, and net proceeds to the seller.
• Everyone receives a final closing statement.

Deposits and contingencies

Earnest money deposit

• Amount: Often 1 to 3 percent of the purchase price, sometimes higher in competitive local conditions.
• Timing: Typically due to escrow within 1 to 3 business days after acceptance.
• Purpose: Signals good faith, applies to the price at closing, or may be forfeited if the buyer breaches per the contract.

Common contingencies

• Loan contingency: Allows cancellation if financing cannot be obtained.
• Appraisal contingency: Protects if the appraisal comes in below price.
• Inspection contingency: Time to inspect and request repairs or credits.
• Pest or termite inspection: Common locally and sometimes required by lenders.
• Title review: Buyer reviews the preliminary title report for exceptions.
• HOA review: For condos or HOAs, the buyer reviews CC&Rs and financials.
• Home sale contingency: Less common in competitive situations, but possible.

Tip: Many contracts set a 17-day inspection period, with loan and appraisal timelines often in the 17 to 21 day range. Always confirm your exact timeline in the signed offer.

Inspections for older homes

South Pasadena has many older and historic homes, which can bring unique findings. In addition to a general home inspection, buyers often consider specialized inspections:

• Pest or termite
• Roof and chimney
• Sewer line and possible jetting
• HVAC and ducting
• Foundation or structural
• Electrical, including knob-and-tube in some older homes
• Pool and spa, if present

If sellers obtain pre-listing inspections, buyers still commonly conduct their own. A home warranty can be part of the negotiation and typically runs a few hundred dollars per year.

Title and local issues

The preliminary title report highlights easements, liens, and covenants. Older neighborhoods can include utility or alley easements, and HOA covenants may apply in certain communities. Unresolved liens must be cleared for escrow to close.

Local issues to verify with the City of South Pasadena include historic preservation, permitting, and any hillside or slope rules if the property sits on terrain. The Natural Hazard Disclosure will identify flood, fire, and seismic zones. If a home has a local historic designation, confirm what improvements are permitted and what approvals you may need.

Closing costs overview

Closing costs vary with price, loan type, and negotiation. In Southern California, sellers customarily pay real estate commissions and the owner’s title policy. Buyers typically pay their lender’s policy, lender fees, appraisal, and their share of escrow and recording charges.

Typical ranges to plan for:

• Buyer closing costs, not including down payment: about 2 to 5 percent of the purchase price when financing
• Seller closing costs: about 6 to 10 percent of the price, with most of that being commission
• Escrow fees: often split 50/50, but negotiable

Transfer taxes and recording fees depend on county and city rules. Los Angeles County recorder fees apply, and some cities charge their own transfer tax. Always have your escrow officer quote live numbers and confirm whether any South Pasadena city transfer taxes or specific requirements apply at the time of sale.

Wire safety and funds timing

Wire fraud is a real risk. Before sending any funds, call your escrow officer at a known, verified phone number to confirm wiring instructions. Do not rely on email alone. Escrow will give you written anti-fraud guidance and final instructions.

Seller checklist

Prepare these items early to keep escrow smooth:

• Completed disclosure package, including TDS and NHD
• Preliminary title report and any prior title documents, if available
• Payoff information for mortgages and liens
• Receipts and permits for major repairs or improvements
• HOA documents for condos or townhomes
• Any termite reports or clearances you already have

If you are downsizing or handling an estate, plan for logistics like decluttering, packing, and timing your move relative to closing. Your agent can coordinate vendors so you stay on track.

Buyer checklist

Stay organized with these basics:

• Full lender pre-approval or proof of funds for cash purchases
• A prioritized list of inspections to order immediately
• Homeowner’s insurance plan, which your lender will require
• Contact information for your escrow officer and title company
• A calendar of contingency deadlines and signing appointments

Your team’s role

Lean on your agent and escrow officer at key points:

• Right after acceptance: open escrow, confirm deposit timing, and set your calendar
• When disclosures arrive: review for accuracy and schedule inspections fast
• During repair and credit talks: negotiate within contingency timelines
• If title issues surface: coordinate with title to clear liens or exceptions
• Before wiring funds: confirm instructions by phone and follow fraud protocols
• As deadlines approach: request extensions in writing if needed

Avoid common problems

• Loan denial or appraisal gap: Strengthen your pre-approval, discuss appraisal strategies, and consider a larger down payment or price adjustments.
• Title or lien issues: Order title early and have the seller address items as soon as possible.
• Inspection surprises: Use targeted inspections for older systems and consider repair credits or escrow holdbacks if work is needed.
• Wire fraud: Verify instructions by phone and follow the escrow company’s security steps every time.

Your next step

Escrow does not have to feel overwhelming. With clear timelines, early disclosures, focused inspections, and steady communication, you can move from acceptance to closing with fewer surprises. If you are planning a sale or purchase in South Pasadena, especially a downsizing or estate transition, you deserve hands-on guidance and calm coordination from start to finish. For a personalized plan, schedule a conversation with JOELLE CONZONIRE GROSSI.

FAQs

What is escrow in South Pasadena real estate?

• It is a neutral process managed by an escrow officer who holds funds and documents, coordinates title clearance, then handles funding, recording, and final disbursements.

How long does escrow usually take in South Pasadena?

• Cash deals often close in 7 to 21 days, while financed transactions commonly run 30 to 45 days, with longer timelines when contingencies are complex.

How much earnest money is typical in South Pasadena?

• Many offers include 1 to 3 percent of the price as a deposit, sometimes higher in competitive situations, usually due within 1 to 3 business days after acceptance.

Who pays which closing costs in South Pasadena?

• Sellers commonly pay commissions and the owner’s title policy, while buyers usually pay lender fees, the lender’s title policy, their share of escrow, and recording charges.

Which inspections are most common for older South Pasadena homes?

• General home, pest or termite, roof, sewer line, HVAC, electrical, and foundation inspections are common, with pool or spa checks when applicable.

How can I avoid wire fraud during escrow?

• Always call your escrow officer at a known number to confirm wiring instructions, never rely on email alone, and follow the escrow company’s anti-fraud procedures.