A First-Time Homebuyer’s Guide – 9) Understanding

A First-Time Homebuyer’s Guide

Everything You Need to Know From Pre-Approval to Getting the Keys

Page 9 – Understanding Escrow and Closing Costs

Once you’ve completed your inspections and due diligence, you’ll move closer to the finish line. In California, escrow acts as a neutral third party that helps coordinate the transaction, manage funds, collect documents, and ensure all contract requirements are completed before the sale closes.

During this time, your lender will continue working on final loan approval, while the escrow and title companies prepare the necessary paperwork. You’ll also need to arrange homeowners insurance, review your closing disclosure, and prepare the remaining funds needed to close.

Closing costs can include lender fees, title and escrow charges, recording fees, prepaid property taxes, homeowners insurance, and other expenses. Your lender and escrow officer can provide estimates so you know what to expect.

Remember, stay in communication with your lender, real estate agent, and escrow officer. Respond promptly to requests and avoid making major financial changes, such as opening new credit accounts or making large purchases, before closing.