What Is Escrow?
In California real estate, "escrow" refers to the process by which a neutral third party â the escrow company â receives, holds, and disburses funds and documents on behalf of the buyer and seller. Every residential real estate transaction in California closes through escrow. Understanding the timeline and your responsibilities at each stage will help you navigate the process with confidence.
Typical Timeline â 30-Day Escrow
Days 1-3: Opening Escrow
The executed purchase agreement is sent to escrow. Buyer deposits the initial earnest money (typically 1-3% of purchase price) within 3 business days. Escrow opens and the title order is placed.
Days 1-17: Due Diligence Period
The buyer conducts all inspections during this period (home inspection, sewer scope, roof, pest inspection, etc.). The seller delivers all disclosures. The buyer reviews all reports and disclosures and may request repairs or credits.
Days 1-21: Loan Processing
For financed buyers, the lender is processing the loan application, ordering appraisal, and underwriting the file during this period. Prompt response to lender requests is critical for maintaining the timeline.
Days 17-21: Contingency Removal
The buyer removes inspection contingencies after completing due diligence. After contingency removal, the buyer's earnest money is at risk if they withdraw without cause.
Day 25-28: Loan Funding Approval
The lender provides "clear to close." Final loan documents are drawn and sent to escrow.
Day 29-30: Signing and Funding
Buyer signs loan documents (in person at escrow or with a mobile notary). Buyer wires closing funds. Lender funds the loan.
Day 30: Close of Escrow
The deed records at the county recorder's office. Escrow closes. Keys are delivered. You own the home.
What Buyers Are Responsible For
- Depositing earnest money within 3 business days of acceptance
- Scheduling and attending all inspections promptly
- Responding to lender document requests within 24-48 hours
- Reviewing all disclosures thoroughly
- Wiring closing funds 24-48 hours before close
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