Buying a Malibu estate should feel exhilarating, not confusing. Still, the word “escrow” can raise questions when you are moving fast on a high‑value coastal purchase. You want clarity on deposits, timelines, and what is unique about closing near the ocean. This guide breaks down how escrow works in California, what is different in Malibu, and how to protect yourself at every step. Let’s dive in.
Escrow basics in California
What escrow actually does
Escrow is a neutral third party that holds funds and documents until every contract condition is met. The escrow officer follows written instructions, collects payoffs and fees, and coordinates signatures and recording. When everything is complete, escrow disburses funds and records the deed so you take ownership. Escrow does not provide legal advice or represent either side.
Escrow vs title roles
The escrow company manages the closing mechanics and safekeeps money and documents. The title company researches the property’s recorded history, resolves issues, and issues title insurance for you and your lender. These firms are often affiliated, but their roles are distinct and both are needed to close securely.
Earnest money in Malibu
How deposits work
An earnest money deposit, or EMD, shows you are serious. It is placed into escrow and typically applies to the purchase price at closing per the contract. In many California markets, EMDs commonly range around 1 to 3 percent of the price, though the amount is always negotiable. In Malibu luxury deals, deposits are often higher, sometimes large fixed sums, to strengthen an offer or meet seller expectations.
What happens if you cancel
If you cancel within your agreed contingencies, the EMD is typically returned according to the contract. If you default outside your contractual rights, the seller may have remedies that can include keeping the EMD, subject to the agreement and any dispute resolution steps. Escrow instructions will specify the timing, who deposits funds, and acceptable payment methods. For large deposits, wire transfers are common, and you should verify wire instructions by phone using a known number.
Timeline to close in Malibu
Standard milestones
Most financed purchases in California close in about 30 to 45 days. All‑cash or very competitive luxury deals can close faster, sometimes 7 to 21 days, if title and disclosures are straightforward. Complex sales with repairs or permitting can take 60 or more days, and may include escrow holdbacks to complete specific items after closing. Recording is handled by the Los Angeles County Recorder when the file is clear to close.
Malibu factors that add time
Coastal disclosures, bluff or slope conditions, and Coastal Commission documentation can extend timelines. Older estates may include unpermitted work that requires permit review or a holdback. Properties on septic need inspections and certifications, which add steps compared to homes on public sewer. Insurance for wildfire, flood, earthquake, or tsunami zones can also take time to secure in high‑risk areas.
Key contingencies to expect
Standard protections
Most California purchase agreements include a loan contingency, an appraisal contingency, a home inspection contingency, and a title review contingency. If the home is part of a common interest community, you will review HOA documents and financials as well. You also receive seller disclosures that trigger your review period during escrow.
Coastal and Malibu add‑ons
Natural Hazard Disclosures should address flood, tsunami, and wildfire zones, along with any local risks. Confirm whether the property has, or needs, Coastal Development Permits and whether any recorded conditions apply. Evaluate structural items exposed to salt air, including metal corrosion, roof, decks, and foundations. Review easements that could affect beach access, views, or future building plans.
Inspections that matter
Structural and systems
Schedule a general home inspection, then add specialists based on the property. In Malibu, you often include roof, structural, pest, and septic inspections. Ocean exposure means paying close attention to corrosion, waterproofing, and exterior finishes. Larger hillside or bluff lots may call for geotechnical review.
Environmental and access
Confirm defensible‑space compliance and fire‑hardening features where applicable. Verify utilities, emergency egress, and access for larger estates or hillside properties. If the property is on septic, obtain current inspection and certification per local requirements. If you plan improvements, discuss any Coastal Commission or City of Malibu permitting effects early in escrow.
Who does what
Escrow and title
The escrow officer coordinates the closing, tracks deadlines, holds deposits, prepares closing statements, and arranges recording. The title company issues the preliminary title report, clears exceptions, and issues title insurance policies at close. Both teams collaborate to resolve liens, judgments, or other recorded items before you fund.
Your agent and lender
Your agent negotiates contingency periods, manages disclosures, and guides you on inspections and local issues. Your lender underwrites the loan, orders the appraisal, and provides loan approval conditions. Attorneys are not required in California, but can join complex luxury, trust, or dispute‑heavy transactions when needed.
Closing costs and prorations
Typical line items
Through escrow, you will see title and escrow fees, recording fees, transfer taxes, and lender fees. Property taxes are prorated to the closing date. If there is an HOA, expect document and transfer fees. Any negotiated credits or an escrow holdback for repairs will show on your closing statement.
Local taxes and fees
City and county transfer taxes or documentary transfer fees may apply. Malibu properties can also be in special assessment districts, which appear as prorations or disclosures. Confirm amounts with your escrow and title teams during your review period so you have a complete picture before removing contingencies.
Risk management for buyers
Wire funds safely
Wire fraud is a real risk, especially with large sums and remote signings. Confirm wiring instructions by phone using a number you obtain independently, and never rely on email alone. Use multifactor verification and treat any last‑minute changes as a red flag. After you send funds, confirm receipt with escrow and your bank the same day.
Appraisal gaps and short escrows
In luxury deals where you bid above recent comparable sales, an appraisal can come in short. If you plan to waive or limit appraisal protections, be prepared to bring extra cash or work with your lender on options. For quick closings, start underwriting and order inspections immediately so you can meet tight deadlines without sacrificing diligence.
Permits and unpermitted work
Unpermitted additions are not uncommon in older Malibu estates. Consider a permit review contingency or an escrow holdback to complete required remediation after closing. Title reports can also reveal recorded conditions from past permits, so review exceptions closely and confirm any obligations with your team.
Your escrow checklist
- Open escrow and deposit the EMD within your contract timeframe.
- Order a general inspection, then add roof, structural, pest, septic, and geotechnical as needed.
- Request and review seller disclosures, Natural Hazard Disclosures, and any Coastal Commission or City of Malibu records.
- Start loan underwriting and appraisal early if you are financing.
- Begin insurance quotes for homeowner, wildfire, flood, and earthquake coverage.
- Review the preliminary title report and confirm easements, liens, and recorded conditions.
- If repairs or permits are pending, negotiate an escrow holdback with clear deadlines.
- Verify wiring instructions by phone using trusted contact information.
- Complete your final walkthrough, sign closing documents, and confirm recording and title policy issuance.
Finish strong
Escrow should give you confidence, not stress. When you understand deposits, timelines, and Malibu’s coastal considerations, you can move decisively and still protect your interests. With the right team, closing feels orderly, private, and seamless.
If you are weighing a purchase, want a second opinion on terms, or need discreet access to inventory, connect with Alex Purewal for tailored guidance.
FAQs
How does escrow work for Malibu luxury homes?
- Escrow holds your deposit and closing funds, tracks your contract deadlines, coordinates title work and loan funding, then records the deed when all conditions are met.
How much earnest money is typical in Malibu?
- Amounts are negotiable, but many California deals cite about 1 to 3 percent, and luxury Malibu offers often use larger deposits to strengthen terms.
How long does Malibu escrow usually take?
- Financed purchases often close in 30 to 45 days, while clean all‑cash deals can close in 7 to 21 days, and complex transactions can take 60 or more days.
What contingencies should Malibu buyers include?
- Common ones are loan, appraisal, inspection, title, HOA review, and seller disclosure review, plus coastal and septic items where relevant.
What Malibu issues can delay closing?
- Coastal permitting, unpermitted work, septic inspections, insurance procurement, and clearing title exceptions can add time.
Who chooses the escrow and title company in California?
- The parties negotiate the selection, and the company proposed in the offer is not final until both sides agree in writing.
How can I reduce wire fraud risk during closing?
- Verify wiring instructions by phone using a known number, treat any last‑minute changes as suspicious, and confirm receipt of funds with escrow and your bank.
