How escrow works

Wondering how escrow works and what's involved? You're in the right place! This post will explain what you can expect throughout each of the stages of escrow. The escrow process begins just after you accept an offer and ends when the buyer receives possession of the home. Let's take a look!

1.                             Opening Escrow & Title:

Once you select an escrow company, opening escrow is relatively fast and easy. To open escrow you simply send the purchase agreement to the escrow officer via email, fax, mail or in-person delivery. Be sure to include the following:

 -- Property address
 -- Purchase price
 -- Escrow period (typically 30-45 days)
 -- Name of all sellers and their contact information
 -- Name of all buyers and their contact information
 -- Name and contact information of any agents involved
 -- Commission that will be paid to any agents

This will help clarify the details for the escrow officer and get the process started smoothly.

2.                             Prepare Disclosures:

You have to complete a list of legally required disclosure forms that will be provided to your buyer for their review. If you wisely completed your Seller's Disclosure packet when you listed your home rather than waiting until you opened escrow, then this step is done in advance. Disclosure forms and rushed timelines can be intimidating for sellers, so many sellers hire a Transaction Coordinator to help them manage the process. Learn more about what forms are required.

3.                             Pest Inspection:

Pest inspections and clearance certificates are often required to close escrow in areas affected by termites. Sellers are usually required to provide the pest inspection report to the buyer within 7 days of accepting an offer. We recommend doing this prior to listing the home for sale so there aren't any surprises during escrow. Doing so will also give you an opportunity to repair any damage caused by termites ahead of time and not delay the close of escrow. 

4.                             Escrow Package:

Your escrow officer will mail you a package, typically within a week of opening escrow, with several documents for you to complete and sign. You'll need to review each document carefully and ensure the escrow instructions exactly match the terms of the purchase agreement.


5.                             Buyer's Inspections:

Depending on where you live, your buyer will typically be given 5 to 17 days from the time you accept their offer to conduct their inspections. The buyer can change the number of days on the offer, so be sure to read your contract to confirm the timeline. These inspections can include a walk-through inspection by a third party home inspector, HVAC, Electrical and plumbing, pool and spa, roof and an appraisal.

We recommend you have a general property inspection done before opening escrow, and ideally, before you begin to receive offers on your home. Completing this inspection ahead of time can help you to shrink or eliminate your buyer's allowable cancellation period and make it difficult for a buyer to ask for repairs after you enter escrow.

6.                             Buyer's Request for Repairs:

The buyer has the right to request repairs within their inspection period. However, you should know that you are not obligated to make any or all of these repairs. Again, it is good practice to complete any repairs that you anticipate a buyer would request ahead of listing the home for sale. This gives your buyer fewer reasons to back out during escrow and will make your home more appealing during the marketing process.

7.                             Contingency Removal:

There are several contingencies in a purchase agreement that give the buyer a way to back out of escrow without penalty. As such, it is critical that you ensure the buyer remove their contingencies the moment their contingency period expires. 

Here's a list of standard contingencies and their associated timeframes:
 -- Loan (21 Days)
 -- Appraisal (17 Days)
 -- Buyer's investigation, including insurability (17 Days)
 -- Condo Disclosures and CC&Rs (17 Days)
 -- Reports/Disclosures including seller disclosures, a physical inspection report and pest report (17 Days)
 -- Title report (17 Days)
 -- Sale of Buyer's Property (Varies)

These contingencies must be actively removed, which means they do not simply expire at the end of the contingency period. A contingency removal form must be completed and signed by all buyers before they are removed


8.                             Buyer's Final Walk-Through:

The buyer typically has the right to do a final walk-through of the property within five days before the close of escrow. This allows the buyer to confirm that the property is in substantially the same condition as it was at the beginning of escrow and that all agreed upon repairs have been made. 

9.                             Close Escrow:

You made it to the finish line! The above steps have been completed, the buyer's loan (if applicable) has funded and you have received confirmation that the grant deed has been recorded. Next, you will receive a final settlement statement from escrow that breaks down your selling costs - usually within a day of closing. These costs are deducted from the purchase price, and you'll find your net proceeds at the bottom of the page. 

You can have escrow wire your sale proceeds directly to your bank account (usually for a small fee) or you can have them cut you a check. The check can be mailed or picked up in person.

10.                        Possession:

The purchase contract will explicitly state the date and time which the buyer receives possession of the property. Normally possession occurs the same day as close of escrow. However, you may agree to give possession before or after close of escrow if you or the buyer need a few extra days to get things in order. 

If you want to stay in the home past the close of escrow, be sure to sign an agreement with the buyer that outlines the terms of possession, such as the number of days you will stay and the per diem rent you will pay. Similarly, if you decide to leave early and the buyer would like to move in before closing, have an interim lease agreement drawn up for your protection. This is the tenth step to successfully close escrow!

You're Done!

Congratulations! The escrow process is probably the most daunting part of selling your home. Want some help navigating this process? Call us now. 

Thinking about selling?

Seniors looking to downsize?





For seniors looking to downsize and buy a new, smaller home, navigating the real estate process can be tricky. From finding the perfect new place to navigating finances, you may need some advice to help you out along the way. Before you start looking for your new home, commit these useful tips to memory.


Planning for Your New Adventure


You’re no stranger to the benefits of planning ahead. From raising a family to retirement, staying organized is the key to ensuring success. The same holds true for buying a new home. You need to put together a roadmap to help guide you through your new real estate venture. Start with the reason for your move, and then begin listing all the steps you need to take along the way. Start packing early, even if it’s bit by bit, so you have a chance to go through all of your belongings and decide what to keep and what to let go of. All that planning will pay off when it comes time to start making big decisions about your new house and your move.


Finding a Home That Fits


You’ll be spending your golden years in your new home. So, it’s important to find one that is just right for you. Think about the size you need and the amenities that will make your life easier. Maybe you need some extra space for the grandkids, or perhaps you’d like a quiet space to do some gardening. Keep your lifestyle in mind when you are looking at neighborhoods and homes. If you or anyone in your family needs accommodations for accessibility, look for homes that have those features or where adding them won’t be too much of a hassle.


Handling Financial Decisions


One of the least fun parts of picking out a new home is getting through all the financial aspects and choices and figuring out how much you can spend. You’ll need to consider details like the down payment and inspection costs right off the bat. It’s also wise to take a look at your credit to make sure everything is in good shape. Comb through your report to spot mistakes and signs of identity theft. Knowing your credit score will make it easier for you to negotiate your best interest rates on home loans. To make the home-buying process simpler, try to get preapproval for your home loan before you start looking at properties.


Enlisting Professionals to Help


Working with an agent, realtor or broker could make your home buying experience less stressful. These professionals will know the market in your area and be able to point you to properties that fit your needs. You also may want to consult a financial advisor or mortgage expert to help you with any financing or monetary concerns. Finally, take care when looking for contractors to make repairs or upgrades on your new home. Look for a licensed contractor, and always have an agreement drawn up before work starts.


Avoiding Regrets and Mistakes


When it comes to finding and buying a new home, it pays to be patient. You want to end up in a home you love, but try not to let your emotions interfere with your decisions. If you fall in love with a home that doesn’t meet your needs or price range, you need to be able to move on and find something that does. Don’t rush into any decisions or agreements, and don’t let homeowners or professionals pressure you into buying something that doesn’t fit your lifestyle. Stay focused on the plans you made earlier, and be prepared to take time to get into a home that’s just right.


Staying Stress-Free


Sure, looking at nice houses can be fun, but actually buying one can be stressful. From putting in an offer to finalizing paperwork, you may find yourself a bit frazzled. You don’t want stress to cause any serious issues, so make time for some self-care. Planning and patience will help relieve some stress, but find other ways to help yourself relax. Reserve a few nights for some dates with your spouse or go for a round of golf to relieve tension.


Getting through the process of buying a new home can be confusing, but it doesn’t have to be. With a little planning and some research, you can find your perfect home faster and start enjoying the best years of your life there.


Photo Credit: Unsplash

Home Price History

How is the market? You ask. Well Ill tell you. To get a really good perspective of where we are today and where we have been take a look below.

Now as you will see we have market corrections on average every 7 - 9 years. Currently we are in the 8th year of recovery and appreciation. Its always interesting to listen to the folks I meet at open house. The narrative at the moment is all on buying, maybe we are not in a frenzy period but the market is still very strong. Still if I am a potential seller, and   I have a CHOICE  on  when I sell, I may want to consider how much longer this bull market in local real estate will continue!

Now as you will see we have market corrections on average every 7 - 9 years. Currently we are in the 8th year of recovery and appreciation. Its always interesting to listen to the folks I meet at open house. The narrative at the moment is all on buying, maybe we are not in a frenzy period but the market is still very strong. Still if I am a potential seller, and I have a CHOICE on when I sell, I may want to consider how much longer this bull market in local real estate will continue!

Plans to transfer your property tax


Hopefully by now you’re aware of the historic effort C.A.R. is spearheading to qualify a ballot initiative for the November 2018 ballot. Known as the Property Tax Fairness Initiative, this measure would allow homeowners 55 years of age or older to transfer their Prop. 13 tax base to a home of any price, anywhere in the state, any number of times, These protections also would be extended to people who are disabled and those who have lost their homes to a natural disaster. It’s a carefully written initiative that includes appropriate safeguards while eliminating California’s property tax “moving penalty.”

In order to qualify the initiative for the ballot, C.A.R. must collect approximately one million signatures from California registered voters. Petitions were mailed to each C.A.R. member in early January, urging them to sign the petition and to obtain four additional signatures of registered voters within the same county, and mail it back to C.A.R.

People are responding enthusiastically to the measure, but C.A.R. also has received a fair number of questions regarding this initiative and how it works, especially in relation to Props. 13, 60, and 90.

We hope this short Q&A will help answer those questions.

Why is the Property Tax Fairness Initiative Needed?
It’s no secret that California is in the midst of a housing crisis. Not only is affordability near an all-time low, but housing inventory remains stubbornly low – wreaking havoc on the market and reducing homeownership opportunities for many would-be buyers in California.

On top of these challenges, nearly three-quarters of homeowners 55 years of age or older have not moved since 2000, furthering constricting inventory. Research has indicated that one of the primary reasons these homeowners are effectively “locked” into their homes is the prospect of paying higher property taxes.

C.A.R.’s Property Tax Fairness Initiative will help these homeowners sell their current homes and move without being subjected to what is effectively a massive “moving penalty.” These homes will then be available for families and other would-be buyers to purchase.

How Do Property Tax Assessments Currently Work?
The amount a homeowner pays in property taxes is based on the assessed value of the home at the time of purchase. Generally, Prop. 13 limits property taxes to 1 percent of the assessed value at the time of purchase, even if the value of the property subsequently increases.

What is Prop. 13?
Prop. 13 is a California proposition that limits the property tax rate to 1 percent for all California property and annual tax increases to no more than 2 percent. This protects homeowners from losing their homes due to unforeseen property tax increases.

There also are two other propositions that affect property taxes – Prop. 60 and Prop. 90.

What is Prop. 60?
Prop. 60 allows senior homeowners, 55 years of age or older, to transfer their property tax baseone time -- to another home in the same county, as long as the purchase price of the replacement home is equal to, or less than, the sale price of the original residence.

What is Prop. 90?
Prop. 90 is an extension of the original Prop. 60 program. Prop. 90 allows senior homeowners to transfer their property tax base, one time, to a home in a different county, as long as the county accepts such transfers.

 Prop. 60Prop. 90C.A.R. Property Tax
Fairness Initiative

Transfer Tax BaseOne timeOne timeUnlimited

Counties AllowedSame countyDifferent county
(if new county
accepts transfer)Anywhere in the state

PriceReplacement home equal to,or less than, the price of the property soldReplacement home equal to,or less than, the price of the property soldAny price

For more information about C.A.R.’s Property Tax Fairness Initiative, visit or send us an email at


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