Congratulations! Your offer was accepted and escrow has been opened on your new home. So what’s next? How long should everything take? Is there a general escrow timeline to follow?

Escrow times vary but most escrows close in 30 days, though the length should be agreeable to both the buyer and the seller. The timeline of your escrow starts the day after the seller has accepted the buyer’s offer, or the buyer has accepted the seller’s last counter offer.

Here is a general escrow timeline for home buyers. While every sale is different, this should give you a good idea of what to expect.


What is Escrow?

Escrow refers to a third-party service that is part of every home purchase. When a buyer and seller initially arrive at a purchase agreement, they select a neutral third party to act as the escrow agent. The escrow agent collects a deposit from the buyer that is equal to a small percentage of the sale price. This deposit is known as “earnest money”. In exchange, the seller takes the property listing off the market. Until the final exchange is completed, both the seller’s property and the buyer’s deposit are said to be in escrow.


How is an Escrow Account Opened?

Once you have completed the contract, or Purchase Agreement, and the Seller has accepted the offer, your real estate agent or lender will open the escrow. The earnest money deposit and the contract are placed in escrow. As a neutral party to the transaction, First American can respond only to those written instructions agreed to mutually by all “interested” parties (Seller and Buyer); First American cannot otherwise alter the contract or create instructions, which protects all interested parties.

Week One – Inspections and Disclosures

The inspection and disclosure process is a critical part of any escrow.  The California Purchase Contract specifically allows a buyer to fully inspect any property they intend to purchase.  The State of California also dictates specific mandatory seller disclosures, and these are usually delivered within the inspection period.  The standard inspection time frame per the California contract is 17 days.  The inspection period is routinely extended to 21 days in the Arnold and surrounding areas, to accommodate some of the unique inspections that may be required in a mountain area.


There are often four inspections during the first week of escrow:

  • Home Inspection – The Home Inspection is ordered and paid for by you, the Buyer. These can include general contractor inspections, pest inspections, roof and chimney inspections, foundation inspections and sewer inspections to see if any or all of these systems have issues that require repair.
  • Agent Visual Inspection – The Agent representing the Buyer in residential real estate transactions in California must do a visual inspection of the property. In other words, they are required to walk through the property, inside and out, and look carefully at what they sell and advise the parties to the contract of any red flags noticed.
  • Lender Appraisal Inspection – If you are taking out a mortgage, a lender appraisal is required. You will pay the lender for the appraisal, but you do not attend the appraisal appointment.
  • Termite/Wood-Destroying Pest Inspection – Home inspectors will look for any hazards, safety threats, or major defects but are limited in what they put in their report about pests. They may raise red flags like wood rot or moisture, and then recommend a specialist take a closer look. The pest inspection is a separate process performed by a licensed pest inspector who’s trained to look for signs of infestations and who does pest inspections specifically for real estate transactions. Sellers usually pay for this inspection, and Buyers do not attend. The termite company will issue a report that is sent to both Buyers and Sellers.


Sellers normally provide a variety of disclosures to the Buyer. Most of these disclosures describe the property, and reveal any material defects or past issues. Here in California, most seller disclosures are due to the Buyers within the first 7 days of escrow. If the property is located in a planned community with a Homeowner Association, the Escrow Officer will order Homeowner Association documentation, and then send directly to you, along with the Preliminary Title Report.


Week Two – Loan Approval and Other Decisions

The second week of escrow is usually the “Decision-Making” week when the lender makes its final decision to approval your loan, and you review all the disclosures to make your final decision about buying the home.


Once you have ensured your credit is ready to start the home loan process, you will typically begin by working with a loan officer at a bank or mortgage provider to get pre-approved for a mortgage. Your loan officer will help you understand the required documents you need during the mortgage process. Your loan officer will help you complete a mortgage pre-qualification application and then submit the application along with the required documents, to an underwriter.


When the lender receives the Appraisal Report, the Seller will be notified if the appraisal has come in “at value.” In the event that the property appraisal value is lower than the purchase price, decisions need to be made. Sometimes, the Buyer will pay the difference between the appraised value and the purchase price. Sometimes, the Seller will lower the purchase price. It may be a combination of both solutions.


You will review the Seller Disclosures, including the HOA documentation. This will help you decide if you want to go through with the purchase of the home.


More often than not, sellers agree to some repairs. This decision is typically wise because it can be costly for sellers to begin marketing again and find a new buyer. Plus, now that the seller is aware of issues, they may have to disclose those issues to the next buyer per applicable disclosure laws.  In addition, the repair list dollar amount is usually relatively small in the scheme of the total transaction.


Week Three – Contingency Releases and Repair Completion

With the exception of lead-based paint, most contracts give buyers 17 days to complete all other inspections, including a home inspection. Again, that time frame can be shortened or extended in the contract.

The seller can cancel the contract at the end of that time if the buyer hasn’t signed a release of contingencies and the seller has delivered notice.

It’s not unusual for buyers who are purchasing land to ask for a contingency to obtain a permit for the right to build. Other homebuyers might make contracts contingent on being able to put in swimming pools. These contingencies should contain a time frame or action to release them.


Week Four – Final Details

During the final week of the escrow timeline, all repairs are completed, and receipts are submitted to the Buyer for review. The Buyer also conducts a final walk-through, to inspect the repairs and verify the house is still in the same condition as when the offer was made. If you are taking out a mortgage, the Escrow Officer will contact you to schedule a loan document signing with a Notary Public. This often takes place at the escrow office, or you can have a mobile notary come to you.

Once the loan is funded, and the grant deed is recorded at the Assessor’s Office, you finally get keys to your new home!

Why Choose Citrus Heritage Escrow?

When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.

Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200