A Buyer’s Guide to Depositing Closing Funds

Buyers can avoid delays at an important time in the escrow process if they understand the requirements for depositing funds for closing.

State law requires that all funds be “collected” or cleared before the escrow officer can authorize recording of the closing documents. For this reason, the following types of deposits are not acceptable.

  • Money orders – Stop payment orders can be placed on these after issuance.
  • Cash – Your escrow company is not a bank and has no way to secure large sums of cash
  • Foreign currency – Your escrow company can not be responsible for exchange rates

Most escrow companies follow these guidelines for acceptable deposits:

If your deposit for closing is less than $500,000.00:

  • Payment may be made in the form of a Cashier’s or Official Check drawn on a California Bank or Savings and Loan.
  • These funds must be on deposit 24 hours before the escrow officer can authorize recording of the documents to close your escrow.
  • If funds are not received in this form, your closing could be delayed from one to ten days or even longer while the escrow company confirms that the funds are “good” or cleared.

If your deposit for closing is $500,000.00 or more:

  • Your funds MUST be deposited by wire transfer. Wired funds are not subject to the clearance procedures that can delay a closing. This form of deposit is by far the most efficient for all parties involved in the transaction.
  • Your escrow officer will provide you with proper wiring instructions.

Talk to your escrow officer if you have questions about your final deposit or any other matter concerning your escrow.