Buying in Castro Valley and wondering what actually happens in escrow? You are not alone. The word can feel mysterious, especially if this is your first East Bay purchase or sale. In this guide, you will learn what escrow is, how the process works in Alameda County, who does what, when your money moves, and how to keep everything secure. You will also get practical tips to help you close with confidence. Let’s dive in.
What escrow means in California
Escrow is a neutral, third-party process that protects both sides while you complete a home purchase. An escrow or title company holds funds and key documents, follows written instructions from the contract, and only releases money and records the deed when all conditions are met. The escrow officer is an impartial administrator who coordinates signatures, funds, and recording. In California, escrow services comply with state escrow and licensing laws, and many title companies also provide escrow services.
How escrow works in Castro Valley
The purchase agreement sets your exact dates, but most financed East Bay closings run about 30 to 45 days. All-cash deals can close faster, often 7 to 14 days. Here is the typical flow you can expect in Castro Valley.
Offer accepted
Your contract is signed. Your agent or the escrow opener starts the file and notifies all parties. Escrow issues instructions, security notices, and begins coordinating title work.
Opening escrow
The escrow company obtains a preliminary title report and provides wiring instructions. You will receive contacts for your escrow officer and how to communicate securely.
Initial deposit
You send your earnest money to escrow by wire or check within the timeframe in your contract, commonly 1 to 3 business days. In Bay Area markets, deposits often range from about 1% to 3% of the price in typical situations. The deposit sits in an insured escrow trust account until closing or proper release.
Contingency periods
You complete inspections, review disclosures, and work through loan and appraisal steps. The preliminary title report flags any liens or easements that may need attention. Your lender orders the appraisal and advances underwriting.
Contingency removal
When you are satisfied, you remove contingencies in writing. Until then, your earnest money is usually refundable if you cancel under the contract. After removal, the deposit generally becomes nonrefundable except for specific protections in the agreement.
Loan disclosure and signing
For financed purchases, your lender must deliver the Closing Disclosure at least 3 business days before the loan is consummated. Use that time to review the numbers and terms. You and the seller sign closing documents and the deed in coordination with escrow and the lender.
Funding, recording, and keys
Your lender sends funds to escrow. Escrow pays off any liens, disburses closing costs, and submits the deed and deed of trust to the Alameda County Recorder. Once recording is confirmed, possession transfers based on your contract, often at recordation. Your agent coordinates keys and access.
Who does what during escrow
- Escrow officer. Opens the file, holds funds, prepares settlement statements, coordinates signatures and payoff demands, disburses funds, and arranges recording.
- Title company. Searches title, issues the preliminary title report and title insurance, and may also act as the escrow holder.
- Lender. Underwrites the loan, orders the appraisal, issues the Closing Disclosure, funds at closing, and secures the deed of trust once the sale records.
- Buyer’s and seller’s agents. Negotiate terms, track timelines, coordinate inspections and repairs, and keep communication flowing among you, escrow, and the lender.
- Alameda County Recorder. Records the deed and deed of trust. Recording makes the transfer public and completes the legal change of ownership.
What money moves and when
- Earnest money. You deliver the initial deposit to the escrow holder. Escrow safeguards it until contingencies are removed and closing conditions are satisfied.
- Closing funds. Your remaining down payment and the lender’s funds arrive in escrow by wire at closing.
- Disbursements. After recording, escrow distributes the seller’s proceeds, pays off existing loans, and pays authorized fees.
A typical sequence is lender funds received, final signatures complete, the deed and deed of trust recorded, then funds disbursed.
Your documents and title insurance
The preliminary title report details liens, encumbrances, easements, and exceptions. Your lender requires a lender’s title policy, and buyers commonly purchase an owner’s policy for added protection against undisclosed title defects. Title issues discovered during the review are often cleared by the seller or the title insurer before closing.
Contingencies, deposits, and cancellations
Common contingencies in California include inspection, loan, appraisal, title, and HOA document review if applicable. While contingencies are open, cancellations under the contract usually allow a return of the earnest money. After written contingency removal, your deposit typically becomes nonrefundable except for contract-specific protections. If an appraisal comes in low, you may negotiate a price change, bring additional cash, challenge the report, or cancel if the contract allows. Repair requests can lead to repairs, credits, or price adjustments. In some cases, escrow holdbacks reserve funds for agreed work to be finished after closing.
Local costs to plan for
Closing costs vary by deal and negotiation. You will see escrow fees, title insurance premiums, lender fees, recording fees, potential transfer taxes, prorated property taxes, and possible HOA or pest-related costs. Castro Valley is an unincorporated area within Alameda County, so recording goes through the county. Customary fee splits can change with market conditions. Ask your agent how fees are typically allocated in Alameda County and confirm the most current Recorder requirements.
Wire fraud safety checklist
Wire fraud is a real risk in real estate. Protect yourself with a few simple steps:
- Call your escrow officer using a phone number you already know to verify wiring instructions before sending any money.
- Do not rely on wiring instructions you receive only by email. Confirm details by phone or within a secure portal.
- Be cautious about last-minute changes to wiring details. Treat them as suspicious and verify directly.
- Use secure communication tools provided by escrow when sending sensitive information.
- Tell your bank the exact account name and number for the escrow trust account and double-check every digit.
First-time buyer tips for Castro Valley
- Clarify your exact deposit amount, due date, and where it must be delivered. Store your escrow officer’s direct contact information.
- Track all contract dates in writing, including inspection, loan, appraisal, and closing targets.
- Review the preliminary title report and seller disclosures as soon as they are available. Ask questions early.
- Expect to receive the Closing Disclosure at least 3 business days before closing on a loan. Compare it to your estimate and ask your lender and escrow to explain any differences.
- Line up inspectors and, if applicable, HOA document reviews early to avoid delays.
- Confirm how and when you will receive keys and possession, since that timing is set by your contract.
Closing day expectations
On closing day, your lender funds the loan to escrow and you confirm that your balance to close has arrived. The seller’s payoff and closing fees are prepared. Escrow submits the deed and related documents to the Alameda County Recorder. After recording is confirmed, escrow disburses funds and your agent coordinates keys. In many contracts, you receive possession at recordation, but always follow your agreement.
Work with a team that guides you
Escrow runs smoothly when each step is tracked and explained. You deserve a team that blends clear data, steady communication, and tough negotiation. Since 2007, our boutique practice has helped East Bay buyers and sellers move from offer to recording with confidence across entry homes, condos, and mid to upper market listings. If you are planning a purchase or sale in Castro Valley or nearby, we are here to guide you from offer strategy through escrow and keys. Connect with The BloomHomes Team to get your questions answered and Get Your Instant Home Valuation.
FAQs
What is escrow in a California home purchase?
- Escrow is a neutral third party that holds funds and documents, follows your contract instructions, and only releases money and records the deed when all conditions are satisfied.
How long does escrow take in Castro Valley?
- Most financed East Bay closings take about 30 to 45 days, while all-cash purchases can close in roughly 7 to 14 days depending on contract terms and readiness.
When does my earnest money become nonrefundable?
- While contingencies are open, your earnest money is usually refundable under the contract; after written contingency removal, it typically becomes nonrefundable except for specific protections in the agreement.
What is the Closing Disclosure and when do I get it?
- The Closing Disclosure lists your final loan terms and costs; for financed purchases, your lender must provide it at least 3 business days before loan consummation.
Who handles recording and when do I get keys?
- The Alameda County Recorder records the deed and deed of trust; possession and key delivery follow your contract, often upon recordation.
What does the preliminary title report show?
- It outlines liens, easements, encumbrances, and exceptions on the property so title issues can be addressed before closing.
Do I need owner’s title insurance in California?
- A lender’s policy is required for loans; an owner’s policy is optional but commonly purchased to protect the buyer against undisclosed title defects.
How do I avoid wire fraud during escrow?
- Verify wiring instructions by calling your escrow officer at a known number, avoid acting on email-only changes, and use the secure portal your escrow company provides.
