Escrow and Title in San Francisco: Who Pays What by Custom

In San Francisco the buyer pays the escrow fee and the owner's title policy, the seller pays the city transfer tax, and the whole thing runs through an escrow company rather than a lawyer's office. That is custom, not law, and the contract can change any of it. Here is what each party does, what it costs, which parts you can shop, and how not to lose your deposit to a fake wire instruction.

What escrow does, what title does, and why no attorney

Escrow is a neutral third party that holds your deposit and loan funds, collects signed documents from both sides, follows the written instructions in the contract, and releases money and deed together only when every condition is met. In California that role is filled by a licensed escrow company or, very often in SF, the escrow department of a title company. Attorneys are not required at a California closing; you hire one only for a specific problem, as when you need an attorney explains.

Title insurance is a separate product that often comes from the same company. The title insurer searches the public record, lists what it found, and then insures you (and your lender) against covered defects that surface later: a forged deed in the chain, an unreleased lien, an heir nobody knew about, a boundary or easement problem the record did not show.

SF custom: who pays what

The SF allocation is a Northern California convention that title companies print on their "who pays what" charts, and the contract you sign can override it. In a multiple-offer situation almost nobody asks the seller to pick up the owner's policy; where you are the only offer, it is a legitimate ask.

The SF transfer tax brackets

San Francisco charges a transfer tax on every deed that records, scaled by price. The current schedule on sf.gov, expressed per $500 of consideration and as an effective rate:

On a $1.4 million condo that is $10,500, paid by the seller at closing. Verify the schedule on the city's page before relying on it. It matters to you twice: a seller netting a number has already subtracted it, and you will pay it yourself when you sell, which is one reason the true cost of owning assumes a multi-year hold.

Owner's policy, lender's policy, and the simultaneous-issue discount

Your lender will require a lender's policy for the loan amount; it protects only the lender and shrinks as you pay down the loan. The owner's policy covers your purchase price. When both are issued together, the lender's policy is written at a reduced concurrent rate, which is why the lender's line on your Closing Disclosure is a fraction of the owner's line. Buying the owner's policy later, on its own, costs far more than adding it now.

Ask which form you are getting: the extended ALTA Homeowner's policy covers more risks (certain encroachments, forced removal of unpermitted structures, some survey matters) than the standard CLTA form, which matters on a 1905 building with an altered rear addition.

Who picks the company, and your right to choose

In SF practice the listing agent typically opens a title file when the home goes on the market, and the offer or counter names that company. Since you are the one paying, RESPA Section 9 says the seller cannot require you to buy title insurance from any particular company as a condition of the sale, and a seller who does is liable for three times the title charges. In practice you weigh that right against offer strength: accept the seller's title company if its quote is in line, or propose your own where you have leverage. Separately, if your brokerage or lender has an ownership interest in a title or escrow company, they must hand you an affiliated business disclosure; the CFPB has fined brokerages for skipping it.

What to shop for right now

Escrow and title is a medium-savings item. California title premiums are filed rate schedules, so a company cannot haggle on the premium, but schedules differ between companies, and escrow fees are set by each company. Get two written quotes for your exact price and loan amount, covering the owner's policy, the concurrent lender's policy and the escrow fee, and ask for the complete fee schedule. Then at closing compare the settlement statement against it. Lines to question: separate "document preparation," "processing," "email or e-doc," "archive," courier and notary fees that were not on the schedule, and any wire fee charged more than once. Closing costs line by line has the full list.

Reading the preliminary title report

Within the first few days escrow sends a preliminary title report, or "prelim." It is an offer to insure, not a guarantee, and the useful part is Schedule B, the exceptions the policy will not cover:

• Property taxes and any supplemental assessments, with amounts.
• CC&Rs for condos and planned developments; the full recorded set is in your HOA package.
• Easements: utility easements are routine; shared driveways, light wells or access across a neighbor's lot deserve a closer look.
• Existing deeds of trust and liens, which the seller must pay off through escrow before the deed records.
• Notices of violation, abatement liens or special assessments recorded against the parcel.

Anything in Schedule B that affects how you can use the property is worth a conversation with your agent or an attorney before your contingencies expire. The prelim also states how the seller holds title and the legal description; check the address, lot and unit number against the contract.

Vesting: how to take title

Escrow will ask how you want to hold title, and the answer has tax and estate consequences. Common California options:

Get professional advice; changing vesting later means recording a new deed.

Wire fraud and the escrow timeline

Wire fraud is the one escrow risk that is catastrophic and entirely avoidable. Criminals compromise an agent's or escrow officer's email, watch the transaction, then send you wire instructions on a convincing letterhead the day your deposit or closing funds are due. The FBI's Internet Crime Complaint Center counted more than $2.7 billion in business email compromise losses in 2024, and real estate closings are a favorite target. The defense, which the CFPB also recommends: escrow will send wire instructions once, early, and will never change them by email; before any wire, call the escrow officer on a number you found yourself, not one in the email, and read the account number back; and treat any "updated instructions" as fraud until a live person you have met confirms otherwise.

The earnest money deposit comes first. In SF it is customarily 3% of the price, which is also the cap on liquidated damages a seller can keep from an owner-occupant buyer under Civil Code 1675, and most contracts call for it within one to three business days of acceptance. A typical financed SF escrow then runs about 21 to 30 days:

• Days 1 to 3: deposit wired, escrow opened, prelim ordered, loan application and disclosures signed, insurance quotes requested.
• Days 3 to 10: inspections if you kept a contingency, HOA documents delivered, appraisal inspection.
• Days 10 to 21: underwriting conditions, HOA questionnaire returned, appraisal in, contingencies removed.
• Days 21 to 30: Closing Disclosure at least three business days before signing, final walkthrough, signing, funding, recording.