Buying or selling a home in Phoenix and unsure what “escrow” really means? You’re not alone. Escrow is a key part of closing in Arizona, and understanding it helps you protect your money, avoid delays, and close with confidence. In this guide, you’ll learn exactly how escrow works in Phoenix, the step-by-step timeline, who does what, what costs to expect, how earnest money is handled, and practical tips to keep your transaction on track. Let’s dive in.
Escrow basics in Arizona
Escrow is a neutral third-party process. An escrow or title company holds funds and documents while you, the other party, and any lender complete the contract steps needed to transfer ownership. The escrow officer coordinates title work, deposit of earnest money, payoff and closing figures, closing documents, and recording of the deed after funding.
It helps to separate a few terms you may hear:
- Escrow for closing vs. mortgage escrow account. The closing escrow is the short-term process described above. A mortgage escrow account is a separate, lender-held account for taxes and insurance.
- Title insurance vs. escrow services. Title insurance protects against covered title defects. Many title companies in Arizona also provide escrow services, but they are different functions.
Who does what in Phoenix closings
Several parties help you close:
- Escrow officer/title company. Neutral administrator that holds funds, prepares closing statements, coordinates title searches, and records the deed.
- Buyer and seller. Provide documents, meet deadlines, and authorize instructions to escrow.
- Real estate agents. Guide you through inspections, timelines, negotiations, and paperwork.
- Lender. Orders the appraisal, underwrites your loan, and delivers closing documents if you finance.
- Maricopa County Recorder. Records the deed to make the transfer official for Phoenix-area properties.
- HOA (if any). Provides the resale/estoppel package and dues information.
Core documents you’ll see include the purchase contract, earnest money receipt, preliminary title report (title commitment), Seller Property Disclosure Statement, HOA resale documents, inspection reports and repair addenda, loan documents and Closing Disclosure (if financed), the deed, and final escrow instructions with a settlement/closing statement.
Step-by-step Phoenix escrow timeline
A typical Phoenix closing runs about 30 to 45 days after mutual acceptance, though it can be faster or slower based on financing, negotiations, and contingency removals. Here is the high-level path from contract to recording.
1) Mutual acceptance and opening escrow
Once both parties sign the purchase contract, escrow is opened with the chosen escrow or title company. You’ll usually deposit your earnest money according to the contract. Escrow creates a file, confirms instructions, and begins coordinating the next steps.
2) Title search and preliminary report
The title team orders a title search and issues a preliminary title report (title commitment) that shows current ownership, liens, encumbrances, and easements. Escrow also requests payoff information for the seller’s mortgage, plus HOA documents if the property is in an HOA.
3) Inspections and contingency periods
You typically have a set inspection period to complete inspections and decide on any repair requests or termination per the contract. Financing and appraisal contingencies usually run at the same time, based on contract language and lender timing. Meeting your deadlines keeps your protections in place.
4) Loan processing and appraisal
If you’re using a mortgage, the lender orders the appraisal and underwrites your loan. Appraisal results can prompt renegotiation or, in some cases, cancellation if the contract allows. Your goal during this window is to provide any lender documents quickly to keep the file moving.
5) Title clearing and final figures
Escrow and title work to clear any title exceptions and prepare your closing statements. Taxes, HOA dues, and other items are prorated as of the closing date. For most consumer mortgages, federal TRID rules require that the lender deliver your Closing Disclosure at least 3 business days before closing; escrow helps coordinate the timing to meet that rule.
6) Signing, funding, recording, and disbursement
You and the seller sign final documents, often at the escrow company office or via approved remote and e-signing options. Funds are wired to escrow by you and your lender. After all conditions are met and funds are in, escrow records the deed with the Maricopa County Recorder. Once recorded, escrow disburses funds per the instructions, including payoffs, commissions, recording fees, title premiums, and the seller’s remaining proceeds.
Money, costs, and prorations
Earnest money is your good-faith deposit held by escrow. If the sale closes, it is applied to your purchase funds. If the sale does not close, refund or forfeiture depends on contract terms, contingencies, and any dispute resolution.
Who pays what can vary and is negotiable. As a general frame:
- Buyers often pay loan-related fees, appraisal, some recording fees, and the lender’s title insurance policy if financing.
- Sellers typically cover their mortgage payoffs, real estate commissions, and any agreed seller concessions.
- Owner’s title insurance is a negotiable item. In many Arizona transactions, sellers often pay for the owner’s title policy, but that is not a legal requirement and can be negotiated in Phoenix.
- Taxes, HOA dues, and certain utilities are prorated to the closing date based on Arizona’s schedule and whether items are paid in arrears.
Your escrow statement will show a clear breakdown of credits, debits, and prorations so you can see where every dollar goes.
Contingencies and earnest money disputes
Common contingencies include inspection, financing, appraisal, clear title, and sometimes the sale of the buyer’s home. You typically must remove contingencies in writing by stated deadlines. If you do not, the other party may have the right to cancel or move forward without that contingency.
Escrow holds earnest money funds according to the contract and written instructions. If a transaction is properly canceled within an active contingency period, you are usually entitled to a refund per the contract. If a dispute arises, escrow will not decide who gets the funds. Instead, they will hold the money until both parties sign a mutual release or a court, mediator, or arbitrator issues a binding decision under the contract’s dispute resolution terms.
Common triggers for disputes include missed financing deadlines, unresolved repair disagreements, title problems that cannot be cleared, and funding delays near closing. Clear communication and quick attention to timelines help you avoid these issues.
Local tips for Phoenix closings
- Verify wire instructions by phone. Wire fraud is a real risk during escrow. Always call your escrow company using a phone number you obtain independently to confirm any wiring instructions. Never rely only on an email.
- Ask about secure closing portals. Many title/escrow companies offer verified portals and two-factor authentication for document delivery and wiring details.
- Plan time for HOA documents. If the home is in an HOA, the resale/estoppel package can take time and may involve fees. Start early to avoid delays.
- Expect e-signing and remote options. E-signatures and remote closings are common in Phoenix, though your lender and state recording rules determine which documents can be electronic.
- Watch proration details. Arizona property taxes and HOA dues are prorated at closing. Ask your escrow officer to walk you through the math so there are no surprises.
What to prepare for closing day
Use this quick checklist to stay organized:
- Confirm final amounts to wire and verify instructions by phone.
- Bring a valid government-issued ID for notary signing.
- Review your Closing Disclosure at least 3 business days in advance if you have a mortgage.
- Confirm utilities and HOA setup or transfer dates.
- Schedule final walkthrough timing with your agent.
Work with a team that keeps escrow smooth
Escrow is detailed, deadline-driven work. The right guidance can save you time, reduce risk, and keep your closing on schedule. Our team brings strong mortgage and title fluency to help you move from contract to keys with clarity and confidence. If you are planning a sale or purchase in Arcadia, Biltmore, South Scottsdale, or Paradise Valley, we are here to help you navigate each step of escrow.
Ready to talk through your timeline and goals? Connect with Phoenix Living to get a clear plan for your closing.
FAQs
Who chooses the escrow or title company in Phoenix?
- The purchase contract usually names the escrow/title company, and both parties can agree to a change. The listing agent often proposes a company, but it is negotiable between buyer and seller.
When does the deed record in Maricopa County?
- After escrow confirms all funds and lender conditions are met, the escrow officer records the deed with the Maricopa County Recorder. Recording is the step that legally transfers title.
Can escrow release sale proceeds before recording?
- Escrow should not disburse funds that impact title transfer before recording. Payoffs are typically coordinated to occur immediately after recording, with final disbursement following recordation.
What happens if my loan falls through before closing?
- Outcomes depend on your contract’s financing contingency and deadlines. If you cancel within an active financing contingency, earnest money is typically refundable. If you removed the contingency or breached, the seller may seek remedies, which can include the earnest money subject to dispute resolution.
How long will escrow hold the earnest money if there’s a dispute?
- Escrow holds the deposit until the parties sign a mutual release or a court, mediator, or arbitrator orders disbursement under the contract’s dispute rules.
Are remote closings and e-signatures available in Phoenix?
- Yes. Many escrow and title companies support e-signing and remote closings, though lender requirements and state recording rules determine which documents can be signed electronically.
