Escrow fees in California, the costs associated with a neutral third party managing funds and documents in a real estate transaction, are typically negotiated between the buyer and seller. Common expenses include services like holding earnest money, paying property taxes and insurance, and ensuring all conditions of the sale are met before transferring ownership. For instance, the escrow holder might disburse funds for a home warranty or necessary repairs agreed upon in the purchase contract.
A clear understanding of how these costs are allocated is vital for both parties involved in a property transaction. This clarity helps avoid misunderstandings and ensures a smooth closing process. Historically, customary practices have often dictated the division of escrow fees, though these can vary by region and are ultimately subject to negotiation. Having a transparent fee structure benefits both buyers and sellers, enabling them to budget effectively and anticipate the final costs associated with the transaction.
