If you are buying or selling a home in California for the first time, the word “escrow” can feel mysterious. It doesn’t have to be. Here is a clear, step-by-step breakdown of the California escrow process and what you need to do at each stage.
What Is Escrow?
Escrow is a neutral third-party process where a licensed escrow company holds all funds, documents, and instructions until all conditions of the sale are met. Once every requirement is fulfilled, the escrow “closes” — the deed transfers to the buyer and funds transfer to the seller.
In California, escrow is required for all real estate transactions. It protects both buyer and seller throughout the process.
Typical Escrow Timeline: 30-45 Days
Days 1-3: Opening Escrow
After an offer is accepted, the buyer’s agent sends the purchase contract to the escrow company. The buyer deposits the initial earnest money (typically 1-3% of purchase price) within 3 business days. The clock starts.
Days 1-17: Inspection Period (Contingency Period)
This is the buyer’s due diligence window — the most important phase of escrow.
- The buyer schedules and pays for a general home inspection (typically $400-$600)
- Additional inspections may include roof, pest, chimney, pool, sewer, or HVAC
- The seller provides all required California disclosures
- Buyers review the Natural Hazard Disclosure report
- Based on inspection findings, the buyer may request repairs or credits
Days 5-21: Appraisal
The buyer’s lender orders an appraisal to confirm the home’s market value. If the home appraises at or above the purchase price, the transaction moves forward. If it comes in low, the buyer and seller must negotiate.
Days 17-21: Contingency Removal
After completing due diligence, buyers formally remove their contingencies — inspection, appraisal, and loan. This is a major milestone: removing contingencies means the buyer is fully committed to purchasing the home.
Days 21-30: Loan Finalization
The buyer’s lender orders a final review, issues a Closing Disclosure (CD), and prepares to fund the loan. The buyer reviews the CD carefully — it details all closing costs and the final loan terms.
Day 30-45: Signing and Closing
- Buyer does a final walk-through (typically 24 hours before closing)
- Both parties sign closing documents (at escrow office or via mobile notary)
- Buyer wires remaining closing funds to escrow
- Lender funds the loan
- County records the deed
- Keys are released to the buyer — congratulations!
Common Escrow Delays and How to Avoid Them
- Loan issues — Stay in close contact with your lender and respond to document requests immediately
- Appraisal gaps — Price your home correctly from the start or have a strategy for low appraisals
- Title issues — Title search happens early; any liens or encumbrances should be resolved quickly
- Last-minute requests — Both parties should avoid large financial changes during escrow
Questions About Escrow?
I walk every client through each step of the escrow process so there are no surprises. Check out our Real Estate FAQ for more common questions, or contact Rachel directly for personalized guidance.
Call or text: (661) 425-2471
Found this helpful? Share it:
