California Escrow Fees: What to Expect & How They Work

Young couple signing paperwork with at escrow company

When a property buyer and seller agree on a transaction an escrow company may become involved. Escrow companies serve as neutral third parties, ensuring all legal aspects of real estate transactions progress correctly and that all payments are made to the right parties. A real estate escrow company only allows funds to be exchanged when all requirements have been met. Escrow companies charge fees for their services and in California they vary by location and company.

Average Escrow Fees

California escrow fees can range between $150 at the low end and $800 at the high end, as of 2014. Generally speaking, escrow fees tend to be around $300 to $500 throughout many residential real estate transactions, with a common average of $450. California escrow rates also tend to be higher than other states due to the traditionally active real estate markets throughout the state.

Escrow Fees by Location

For most states, escrow fees stay primarily the same throughout the state but California is a notable exception. Real estate rules and fees in California vary between northern and southern areas, a clear division that can make it difficult to estimate costs for the entire state. Because the southern half of California uses independent escrow services, real estate escrow fees can be as much as double what the northern part of the state charges.

Variance in Escrow Fees

Escrow fees are not set by the states and there's sometimes a wide variance in fees not only from area to area but also between escrow companies. The nature of the real estate transaction itself also affects escrow fees. If a real estate sale and purchase is complex, escrow fees will be higher. The price of a real property can also increase the cost of escrow services, especially in southern California where every $1,000 of sale price increases escrow fees.

Additional Escrow Fees

Escrow fees in California may also incur additional fees in specialized circumstances. For instance, if real estate escrow needs to close outside of the escrow company offices then the company may charge an extra $25 to $35 for holding the closing elsewhere. Shopping among California escrow companies for competitive rates may help. But comparing fees between escrow companies through an official report can also cost up to $200 on its own.