Escrow opens the moment a purchase agreement is signed and a neutral third party — the escrow holder — is named to hold funds and documents until every condition of the contract is met. This is where the paper trail starts: an escrow number is assigned, a contact sheet circulates to everyone on the transaction, and the buyer delivers an earnest money deposit as a show of good faith. Escrow instructions, drafted from the purchase agreement, become the rulebook the escrow holder follows for the rest of the transaction — they cannot release funds or documents outside of what those instructions say. Most of the terms below describe this setup phase: who's involved, what gets deposited, and what the escrow holder is authorized to do before a single contingency has been cleared.
- Buyer Opening Package
- The set of escrow documents sent to the buyer at the opening of escrow including escrow instructions, statement of information, preliminary change of ownership report, and vesting information request.
- Contact Sheet
- An internal escrow document listing all parties to the transaction and their contact information including buyer, seller, agents, lender, and title representative.
- Earnest Money Deposit (EMD)
- A good-faith deposit made by the buyer at the opening of escrow to demonstrate serious intent to purchase. Typically 1–3% of the purchase price in California.
⚠ Wire fraud warning: Always verify wiring instructions by calling the escrow company directly using a phone number from their official website — never from an email. EMD wire fraud is the most common point of attack in real estate transactions. See the Wire Fraud Checklist tutorial →
- Escrow
- A neutral third-party arrangement where an escrow holder holds funds, documents, and instructions from all parties until all conditions of a transaction are met and the escrow can close.
- Escrow Fee
- The charge for escrow services, typically split equally between buyer and seller in Southern California unless otherwise negotiated. Usually calculated based on the purchase price.
- Escrow Holder
- The neutral party — typically a licensed escrow company or title company — that holds funds and documents and follows the written instructions of the buyer, seller, and lender.
- Escrow Instructions
- Written directions signed by the buyer and seller that tell the escrow holder exactly what conditions must be met before escrow can close. These become the governing document of the transaction.
- Escrow Number
- A unique identification number assigned to each escrow transaction by the escrow company. Used to reference the file in all communications and documents.
- Estimated Seller Net Sheet
- A preliminary estimate prepared by escrow showing the seller an approximation of their net proceeds after deducting all costs, fees, and payoffs. Often prepared before escrow opens at the request of the listing agent.
- HOA Demand
- A statement from a homeowners association showing all amounts owed by the seller including dues, special assessments, fines, and transfer fees that must be paid through escrow at closing.
- Natural Hazard Disclosure (NHD)
- A report required in California disclosing whether a property is located in any state or locally mapped hazard zones including flood, fire, earthquake fault, seismic hazard, and wildland fire areas. Ordered by the seller or agent — not by escrow.
- Open Order Sheet
- An internal escrow document created when escrow is opened that captures all key transaction details including parties, property address, purchase price, loan amount, and important dates.
- Opening Escrow
- The process of establishing an escrow by depositing the signed purchase agreement and earnest money deposit with the escrow holder, officially starting the transaction timeline.
- Payoff Demand
- A written statement from an existing lender showing the exact amount required to pay off a loan as of a specific date, including principal, interest, and any fees. Ordered by escrow after the preliminary title report is received and the seller opening package is returned.
- Preliminary Title Report (Prelim)
- A report issued by the title company early in escrow that shows the current state of title including ownership, legal description, and any liens, encumbrances, or exceptions that affect the property.
- Purchase Agreement
- The signed contract between buyer and seller that outlines the terms of the sale including price, contingencies, and closing date. Also called the Residential Purchase Agreement (RPA) in California.
- Residential Purchase Agreement (RPA)
- The California Association of REALTORS® standard purchase contract used in most California residential transactions. The December 2024 version includes updated contingency and commission terms.
- Seller Opening Package
- The set of escrow documents sent to the seller at the opening of escrow including escrow instructions, statement of information, preliminary change of ownership report, and other required forms.
- Statement of Information (SI)
- A form completed by buyers and sellers providing personal identifying information used by the title company to distinguish the parties from others with similar names in public records.
- Wiring Instructions
- Official bank transfer instructions provided by the escrow company telling the buyer where to send the earnest money deposit and closing funds.
⚠ Wire fraud warning: Never send funds based on wiring instructions received by email without first calling the escrow company directly to verify. Fraudsters intercept emails and substitute fake wiring instructions. See the Wire Fraud Checklist tutorial →