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Steps in the California Real Estate Closing Process

In California, the real estate closing process is the final step toward buying a home. It is also commonly referred to as “settlement” or “close of escrow.”

As a home buyer, it’s important that you understand the California closing process so you can better prepare for it. We’ve put together a short guide to the mortgage and escrow closing process in California, and the various steps that happen leading up to it.

California Real Estate Closing Process Explained

The first thing to understand is that the process can vary slightly from one home buyer to the next, and for a number of reasons. So your real estate closing might differ from the scenarios and examples included below. With that being said, there is a standard sequence of events for an escrow closing process in California. And we’ve covered them below.

In the state of California, an escrow is officially closed the day the Grant Deed is recorded in the official records at the County Recorder’s office. Property ownership transfers from the seller to the buyer when the deed is date-stamped by the County Clerk.

Home buyers usually receive a closing disclosure a few days before the closing date. This document provides a lot of in-depth information about your loan, including the amount you are required to pay when you close (which is usually labeled as “cash to close”).

Technically speaking, the escrow is not closed the day the buyer signs all of the loan documents, or when the lender funds the mortgage loan. These are both important steps in the California closing process, and they must occur in order for the Grant Deed to be recorded. When the deed is stamped and recorded, the closing of escrow is officially complete.

Related: California mortgage process explained

Specific Steps and Timeline

How long does the real estate closing process take in California? This is another common question among home buyers. Having a general understanding of the timeline can help ease the stress typically associated with an escrow closing. So let’s talk about the timing.

After the home has been appraised, and after all of the buyer’s financial documents have been reviewed by the underwriter, the mortgage loan officer or processor will inform all parties of the final loan approval. At this point, the mortgage lender is ready to draw up the documents for the closing process. This usually includes the deed of trust, the mortgage note, and any disclosures or addendums the buyer needs to sign.

The time it takes to complete this step can vary. But it usually only takes one or two business days for the documents to be delivered to the escrow officer or agent. The escrow officer is responsible for overseeing the final escrow closing process, including all signatures for the parties involved. This individual will contact the buyer to set up an appointment for signing the documents. It is the home buyer’s responsibility to review all documents carefully, and to sign them in a timely manner so the closing can occur as scheduled.

Once the buyer has reviewed and signed all of the closing documents, the escrow officer will combine them with any other documents within the escrow file, and finally return everything to the mortgage lender. In a typical scenario, the lender will receive the documents back one or two days after the buyer has signed them.

When the mortgage lender receives and reviews all of the signed documents, they will issue funds. This is referred to as the “funding” of the loan. This process usually takes two to three business days, but can sometimes be completed one day after receipt of documents. (Again, the entire California real estate closing process can vary. These are just average times being presented here.)

Once the funds are sent to the escrow company, usually by wire, the deed recording can be scheduled. This usually occurs the next business day after funds are received, but it can vary.

As mentioned earlier, the final step in the California mortgage and escrow closing process occurs when the Grand Deed is recorded and stamped at the County Hall of Records. This final step officially transfers property ownership from the seller to the home buyer. You may now pop the champagne!

Related: California home buying process

Contact Us if You Need a Loan

At Bridgepoint Funding, we pride ourselves on our ability to deliver a smooth, problem-free closing process. We know it’s important for you to close on time, so we do everything within our power to make sure that happens. We are diligent and proactive throughout the entire process.

Please contact us if you would like to apply for a loan, get a rate quote, or get straight answers to your financing-related questions!

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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