Escrow—What Is It?
Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law - Section 17003 of the Financial Code - provides the legal definition.

Why Do I Need Escrow?
Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

Escrow—How Does It Work?
The principals to the escrow - buyer, seller, lender, borrower - cause escrow instructions to be created, signed and delivered to the escrow officer. If a broker is involved, he or she will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions.

The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow are met or achieved, the escrow will be “closed.” Each escrow, although following a similar pattern, will be different in some respects, as it deals with YOUR property and the transaction at hand.

The duties of an escrow holder include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with instructions; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms and conditions have been met; and distributing the funds in accordance with instructions and provide an accounting for same - the Closing or Settlement Statement.

Who Chooses The Escrow?
The selection of the escrow holder is normally done by agreement between the principals. If a real estate broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and who is experienced in handling the type of escrow at hand.

What Do I Have To Do While In Escrow?
The key to any transaction as important as your sale, purchase or loan, is to READ and understand your escrow instructions. If you do not understand them, you should ask your escrow officer to explain the instructions. Your escrow officer is not an attorney and cannot practice law; you should consult your lawyer for legal advice. Do not expect your escrow officer to advise you as to whether or not you have a “good deal”or are doing things the right way. The escrow officer is there to follow the instructions given by the principals in the escrow. In order to expedite the closing of the escrow, you should check with your escrow officer as to what specific items you must do to accomplish the closing.

What Can I Do To Expedite The Closing Of This Escrow?
Respond quickly to correspondence. This will assist in the timely closing of the transaction. If you are required to deliver funds into the escrow, make sure that you provide “good” funds in the form of a wire transfer or cashier’s check drawn on a California bank.

click here for wire instructions

Do not give the escrow officer a personal check and expect the escrow to close immediately; the escrow can only close on cleared funds, and the processing of a personal check can take days, possibly even a week or more. When the escrow officer closes the escrow, some of you may want the closing papers, checks, title policies, statements, etc. made available immediately. There are many aspects to the closing of escrow, and some of these cannot be processed on the day of the closing; they may take several days.

If you have a special need, you should communicate that need to the escrow officer early in the processing of the escrow.

Excerpted from Real Estate ABC.com
http://www.realestateabc.com/homeguide/Escrow.htm