Reference
Glossary of escrow terms
Escrow comes with its own vocabulary. Here are the words you'll see on your paperwork, grouped and defined in plain language.
These are the terms that come up most often in a California escrow. Definitions are kept short and general. For anything specific to your situation, ask your escrow officer.
People & parties
- Escrow holder — the neutral company that holds the funds and documents and carries out the agreement. Autumn Skye is the escrow holder.
- Escrow officer — the person at the escrow company who manages your file and is your main point of contact.
- Principal — a main party to the transaction, meaning the buyer or the seller.
- Buyer — the party purchasing the property, sometimes called the buyer or purchaser.
- Seller — the party selling the property, sometimes called the seller or vendor.
- Real estate agent — the licensed agent representing the buyer or the seller in the deal.
- Lender — the bank or mortgage company providing the buyer's loan.
- Title company — the company that researches ownership and issues title insurance for the property.
- Notary — the person who verifies your identity and witnesses your signature on documents that require it.
Money & figures
- Earnest money deposit — the buyer's good-faith deposit, held in escrow and applied toward the purchase at closing.
- Proration — splitting a shared cost, like property taxes, fairly between buyer and seller by date.
- Closing costs — the fees and charges, beyond the price of the home, that are paid at closing.
- Escrow fee — the charge for the escrow holder's services, usually based on the price and type of transaction.
- Payoff — the amount needed to fully pay off an existing loan or lien on the property.
- Impounds — money the lender collects and holds to pay your property taxes and insurance, also called an escrow account by lenders.
- Credit — an amount applied in your favor on the settlement statement, lowering what you owe.
- Debit — an amount charged against you on the settlement statement, adding to what you owe.
- Settlement statement — the itemized summary of all the figures in your transaction, showing what each side pays and receives.
Title & documents
- Title — legal ownership of the property.
- Preliminary title report — an early report showing the current owner and anything recorded against the property, like loans or liens.
- Deed — the document that transfers ownership of the property.
- Grant deed — the common California deed used to transfer ownership from seller to buyer.
- Vesting — how you hold title, for example as joint tenants or as community property.
- Contingency — a condition that must be met before the deal moves forward, such as a loan approval or an inspection.
- Disclosure — a document where the seller or another party shares known facts about the property.
- Lien — a recorded claim against the property for a debt, such as a mortgage or unpaid taxes, that usually must be cleared before title transfers.
- Easement — a recorded right for someone to use part of the property, like a shared driveway or a utility line.
Timeline & milestones
- Open escrow — the start of the process, when the escrow holder receives the signed agreement and opens the file.
- Contingency removal — the point where a buyer removes a contingency, confirming that condition is satisfied.
- Signing — when the parties sign their final documents, often with a notary present.
- Funding — when the lender releases the loan money to escrow.
- Recording — filing the deed with the county to make the transfer of ownership official.
- Close of escrow — the moment the deed records and the transaction is complete.
- Disbursement — paying out the funds after closing, including the seller's proceeds and the payoffs and fees.
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