Escrow FAQs
A Simple, steady explanation of the questions people ask most, especially during probate.
General Escrow Questions
Q1: What exactly does escrow do?
Escrow is a neutral third party that:
- Handles documents.
- Manages the financial flow.
- Tracks deadlines.
- Communicates with lenders and title.
- Ensures both sides meet their contractual obligations.
- Disburses funds safely at closing.
Escrow protects both buyer and seller by following only written instructions.
Q2: How long does escrow take?
In a standard sale of Real Estate, 25-45 days, depending on the lender.
In probate:
- Full Authority: similar to a standard sale timeline.
- Limited Authority: may require court confirmation, adding weeks or months.
Q3: When is my sale considered “closed”?
When the county recorder officially records the deed.
Funding + recording = closing.
Q4: Can escrow give me legal advice?
No.
Escrow can explain the process, but cannot give:
- Legal advice.
- Tax advice.
- Strategy.
- Opinions.
In legal matters, the attorney advises the representative.
Money & Funding Questions
Q5: When does the buyer send the remaining down payment?
On closing day, early in the morning (before 10–11 AM).
Late funds may delay recording.
Q6: How does escrow pay off the seller’s mortgage?
Escrow requests a formal payoff demand from the lender and uses part of the sale proceeds to pay it off at closing.
Q7: When do the beneficiaries receive their proceeds?
Funds are released after recording.
Wire transfers usually arrive the same day or the next business day.
Q8: Can beneficiaries receive early cash from escrow?
No.
Escrow cannot release funds early.
However, heirs can pursue outside inheritance advance services.
These are separate companies, not escrow or the estate, and repayment will come from the heir’s share after closing. Some call them loan sharks, but, like everything in life, there is a price for your needs and wishes.
Q9: The Priority Order for Payment in California Probate
California probate has a strict statutory hierarchy for how an estate must pay debts, fees, and expenses. The order is:
1 Court & Administrative Costs (Top Priority)
- Court filing fees
- Publication fees
- Probate referee fees
- Bond premiums (if required)
2 Attorney Fees
- Statutory attorney fees.
- Court-approved extraordinary fees (if applicable).
3 Executor / Administrator Fees
- Statutory compensation.
- Court-approved extraordinary compensation (if applicable).
4 Secured Debts With Priority by Law
Examples:
- Mortgage payments.
- Property taxes.
- Mechanic’s liens.
- Any debt secured by collateral.
These get paid before general estate expenses because the property cannot close without resolving them.
5 Funeral Expenses
California allows a limited priority for reasonable burial expenses (up to statutory maximums).
6 Expenses of Last Illness / Medical Bills
- Hospital bills.
- Hospice.
- Medical treatment in the final years/months.
These are given priority over general unsecured creditors.
7 General Unsecured Creditors
- Credit cards.
- Personal loans.
- Utility bills.
- Judgments not secured by real property.
8 Estate Operating Expenses
These are paid only after the creditor classes above:
- Insurance.
- Repairs.
- Maintenance.
- Utilities.
- Property preservation costs.
- HOA dues.
- Landscaping/cleaning.
- Probate-specific preparation costs.
9 Realtor Commission + Escrow/Title Fees
Although these are paid at closing, technically, they are transactional expenses, not priority debts.
They do not outrank creditor claims but are deducted from sale proceeds before distribution.
10 Beneficiaries (Last in Line)
After all debts, fees, liens, and costs:
Remaining estate = Beneficiary inheritance
Escrow oversees only the real estate portion of this flow.
Repair, Contractor & Credit Questions
Q10: Does escrow decide whether repairs must be done?
No, the repair decisions come from:
- Buyer requests.
- Seller/executor decisions.
- Written agreements.
- Lender requirements.
- Court authority (for probate).
Q11: Can escrow pay a contractor directly?
Yes, but only if:
- The seller/executor authorizes it in writing.
- A proper invoice is provided.
- The request aligns with the contract.
- Funds are available.
Escrow does not manage or supervise contractor work.
Q12: Can the buyer request repairs after the inspection?
Yes, but they are requests, not obligations.
Both sides must sign an agreement for repairs, credits, or price changes to take effect.
Q13: What if heirs disagree about repairs or expenses?
This is very common.
Generally:
- Executors have the authority for necessary expenses.
- Attorneys help resolve disagreements.
- Escrow follows instructions once they are settled.
No funds are released from escrow without proper authorization.
Probate-Specific Escrow Questions
Q14: What documents does escrow need from the executor?
Usually:
- Letters Testamentary or Letters of Administration.
- ID verification.
- Death certificate.
- Any court orders (if needed).
- Tax EIN for the estate if applicable.
Escrow will guide you step-by-step.
Q15: What if the executor has limited authority?
Some actions may require court approval, such as:
- Certain repairs.
- Price reductions.
- Credit to the buyer.
- Sale confirmation.
Escrow cannot proceed without the required documents.
Q16: What if one beneficiary wants to keep the home?
This is where Double Escrow may apply.
The buying beneficiary can:
- Buy the property from the estate.
- Pay the other heirs their shares.
- Apply (if eligible) for Prop 19 to preserve the parent’s tax base.
Escrow coordinates both sides through a single day of closing.
Q17: Can the executor be reimbursed for estate expenses?
Yes, via escrow at closing, if:
- Valid receipts/invoices are provided.
- The expense supports the estate.
- Written instruction is given.
- Funds are available in proceeds.
All expenses must appear in the probate accounting.
Q18: Can heirs object to how the executor uses estate funds?
Heirs may express concerns, but the executor has legal authority to act reasonably for the estate’s best interest.
If needed, the probate attorney or court clarifies what is permissible.
Escrow Closing & Recording Questions
Q19: Why do recording delays happen?
Common reasons:
- Late wire transfers.
- Lender arriving late with funding.
- Recorder’s office backlogs.
- System outages.
- Missing documents.
Escrow will keep you updated if any delays occur.
Q20: What happens on the actual day of closing?
In simple terms:
- Buyer funds arrive.
- Escrow balances the file.
- The title prepares the recording package.
- Documents are submitted to the county.
- The county records the transfer.
- Escrow disburses proceeds.
- Buyer receives keys.
If you have a question that isn’t answered here yet, you’re always welcome to ask.
If something worries you, even a small detail, you don’t have to carry it alone.
Ask me a question About Your Escrow: Talk Through Your Situation