Preparing for Escrow

How to Best Prepare for Escrow 

Preparing for escrow is one of the most effective ways to keep your real estate transaction on track. In situations where transactions involve trusts, investment properties, and entity ownership, being proactive can help avoid delays and unnecessary stress. 

An understanding of what information escrow will need upfront can make the process smoother for everyone involved. 

A Quick Escrow Disclaimer 

Escrow officers are neutral third parties and do not act as attorneys or CPAs. Legal and tax guidance should be obtained from your professional advisors. Escrow’s role is to collect documents, follow instructions, and help facilitate a compliant and timely closing. 

Buyers: How to Prepare for Escrow in Long Beach 

Buying in an Entity Name 

Due to the upcoming enforcement date of March 1 for the Anti Money Laundering Act under the department of FINCEN -If you are purchasing property in Long Beach ( or anywhere in the US) under an LLC, trust, or other entity, be prepared to provide escrow with: 

• Entity formation documents 
• Operating agreements or trust documents 
• Documentation for all authorized signers (including DOB/SSN)  
• Have these documents ready when escrow opens to prevent approval and closing delays. 

Using Funds from Someone Other Than the Buyer 

If any portion of your purchase funds will come from a third party, notify escrow immediately. California escrow requirements mandate a Third-Party Receipt signed by all parties authorizing the funds to be used for the buyer’s benefit. 

Married Buyers Taking Title as Sole and Separate 

If you are married but purchasing property in your individual name as sole and separate property, inform escrow early. This allows sufficient time to prepare the appropriate deed for your spouse to relinquish any potential interest—avoiding uncomfortable or time-sensitive issues later in escrow. 

Sellers: Preparing for a Timely Close of Escrow 

Existing Loans and Liens 

Sellers should provide complete contact information for all lenders with an interest in the property, including: 

• Institutional mortgages 
• Private party loans 
• Home equity lines of credit 
• PACE or HERO loans 

If private loans were previously paid off, confirm that reconveyance documents were properly recorded with Los Angeles County. 

Selling as a Successor Trustee 

If you are selling property in Long Beach as a Successor Trustee, escrow will typically require: 

• A copy of the Trust Agreement and all amendments 
• A Death Certificate, unless an Affidavit of Death of Trustee has already been recorded 

Providing these documents early helps escrow prepare accurate instructions and deeds. 

Trust Tax and Reporting Requirements 

Trust sales require a federal tax identification number. Escrow must file required California and federal tax forms, including Franchise Tax Board Form 593C and IRS Form 1099. Having this information ready helps prevent last-minute filing issues. 

County Tax Assessor Notifications 

Certain transactions require notification to the Los Angeles County Tax Assessor regarding the trustee’s date of death. Check with your attorney or CPA to ensure these filings have been completed, as specific timelines and exemptions may apply. 

Owner-Occupied Multifamily Properties 

If you occupy part of a multifamily property and rent out the remainder, escrow may require separate California Franchise Tax Board 593 forms reflecting the portion used as a personal residence versus rental property. Proper reporting helps avoid tax compliance concerns. 

Preparing Early Makes a Difference 

Whether you are buying or selling real estate in Long Beach, addressing escrow requirements upfront allows your independent escrow company to work efficiently and proactively. Providing complete information at the opening of escrow helps reduce delays, minimize stress, and support a successful closing.