Demystifying Escrow: A Typical California Escrow Timeline
Buying or selling a home involves several steps, and the escrow process can often seem confusing to those unfamiliar with it. At Neighborhood Escrow, we are here to guide you through each step and ensure a smooth transaction. Here’s a detailed look at a typical California escrow timeline to help you understand what to expect.
Day One: Entering Pre-Escrow
The escrow process begins once the seller accepts the buyer’s offer and both parties sign a purchase agreement contract. This stage is known as pre-escrow. During this time, you’ll start filling out additional forms and will be in regular contact with Neighborhood Escrow as we work towards closing the transaction.
Days Two – Five: Funding the Escrow
Next, the escrow account must be funded. This involves the buyer depositing a portion of the down payment, often referred to as earnest money, into the escrow account. Typically, the buyer’s real estate agent facilitates this. The escrow officer will send specific instructions, which usually include:
- Grant Deed: Needs to be notarized.
- Escrow Instructions: Must be signed.
- Tax Forms: Required documents for the transaction.
The seller must return these documents to the escrow company to proceed.
Days Three – Twenty: Disclosures and Inspections
During this period, the buyer conducts due diligence to ensure there are no hidden issues with the property. Key activities include:
- Access to Property: The buyer needs access for inspections, and the seller must keep utilities on until escrow closes.
- Disclosures: The buyer receives a list of disclosures about the property, as mandated by California law.
- Home Inspection: A general contractor inspects the home. Additional inspections (chimney, pest, foundation, sewer) may be conducted if necessary.
Day 20 and Beyond: Negotiations Based on Inspection Results
After inspections are complete, the buyer can request repairs or price adjustments based on the findings. The options are:
- Request Repairs: The buyer asks the seller to make the necessary repairs.
- Price Reduction: The buyer asks for a price reduction to cover the cost of repairs.
Once both parties agree on how to proceed, the buyer signs the inspection results, and the process moves forward.
Day 24 and Beyond: Securing Funding
In the final stages, the buyer completes several critical tasks:
- Appraisal: The property is appraised to determine its value.
- Homeowner’s Insurance: The buyer arranges for homeowner’s insurance.
- Loan Approval: The buyer secures funding from their lender and removes the loan contingency.
Ensuring a Smooth Escrow Process
The escrow process involves multiple steps and detailed coordination, but with the right support, it can proceed smoothly. Whether you are buying or selling a home, having an experienced escrow agent is essential.
At Neighborhood Escrow, we are dedicated to providing expert escrow services and ensuring a seamless transaction for our clients. If you have questions or need assistance, contact us at 310-378-2456. We are here to help you through every step of the escrow process, ensuring your home-buying or selling experience is as stress-free as possible.
