The Escrow Process: Everything You Need to Know

Once your offer on a condo is accepted, you’re “in escrow.” It’s the stretch between the handshake and the keys, and it’s where most of the real work of a purchase happens. Here’s how escrow works in California, step by step.

What is escrow?

Escrow is a neutral third party, an escrow company or officer, that holds the buyer’s money and the documents until every condition of the sale has been met. Only then does the money go to the seller and the property go to the buyer. Neither side can walk off with the other’s money or the deed early.

How long does escrow take?

Typically about 30 days for a financed purchase in California, sometimes shorter for cash buyers and longer if the loan or the building’s paperwork takes extra time. Condo purchases can take a few days longer than houses because the lender also reviews the building.

Step 1: Open escrow and make your deposit

After the purchase agreement is signed, escrow is opened and you make your earnest money deposit, commonly around 3% of the price in California. The deposit is held by escrow and credited toward your down payment at closing.

Step 2: Inspections and disclosures

During the contingency period, you’ll get a home inspection, review the seller’s disclosures, and request any repairs or credits. On California’s standard purchase contract this period is often 17 days, though buyers and sellers can negotiate it.

Step 3: Review the HOA documents

For a condo, the seller provides the association’s documents: CC&Rs, bylaws, budget, reserve study, recent minutes, and any pending special assessments or litigation. Read them carefully during your contingency period. See our guide to what you really own when you buy a condo.

Step 4: Appraisal and loan approval

Your lender orders an appraisal and finalizes underwriting, including a review of the building: its reserves, insurance, owner-occupancy and any litigation. Once the loan is approved, you remove your loan contingency.

Step 5: Title and insurance

A title company checks that the seller can transfer clear ownership and issues title insurance. You’ll also need your HO-6 insurance policy in place before closing.

Step 6: Final walk-through

A few days before closing, you walk through the home to confirm it’s in the agreed condition and any repairs were made.

Step 7: Sign, fund and record

You sign the loan and closing documents, your lender funds the loan, and the deed is recorded with the San Diego County Recorder. Escrow pays the seller, and the keys are yours.

Who pays for what?

Buyers and sellers usually split escrow fees, and each pays their own share of closing costs. In San Diego County, the seller customarily pays the county documentary transfer tax. Your purchase agreement spells out the details.

Buying or selling a Downtown condo?

The Neuman Team has guided Downtown San Diego buyers and sellers through escrow since 1981, with more than 7,400 closed sales, and has been #1 in 92101 for homes sold since 2000. Read our guide to buying your first condo or call (619) 595-7025.

Frequently Asked Questions

How long does escrow take in California?

Typically about 30 days for a financed purchase, sometimes less for cash buyers. Condo purchases can take a little longer because the lender also reviews the building.

How much is the escrow deposit in California?

The earnest money deposit is commonly around 3% of the purchase price. It’s held by escrow and credited toward your down payment at closing.

What can delay a condo escrow?

Slow HOA documents, lender questions about the building’s reserves or insurance, appraisal issues, and repair negotiations after inspection are the most common causes.