What is escrow and how does it work in San Diego real estate?
Escrow is a secure, third-party process that ensures all conditions of a home sale are met before money and property change hands. In San Diego, escrow typically spans 30 to 45 days and involves everything from earnest money deposits to final paperwork and title transfers.
What Is Escrow?
Escrow is a neutral, third-party account where money and documents are held until all parts of a real estate transaction are completed. It’s designed to protect both the buyer and the seller.
In San Diego, once your offer is accepted, the transaction officially enters escrow. This is the period when inspections happen, loan approval is finalized, and all terms of the agreement must be met.
Why Escrow Matters When Buying a Home in San Diego
San Diego real estate moves fast, and escrow provides structure to a complicated process. It ensures:
- Earnest money is held securely
- All conditions (contingencies) are met
- The title is clear
- Funds are distributed properly
Schwarz Real Estate Group works closely with experienced escrow officers who communicate clearly and make sure every detail is managed efficiently.
Key Escrow Steps in a San Diego Home Purchase
1. Open Escrow
Once the purchase agreement is signed, escrow is opened. The buyer submits the earnest money deposit, typically 1 to 3 percent of the purchase price, which shows commitment to the purchase.
2. Contingency Period
This is when inspections, appraisals, and loan approvals happen. Buyers can walk away if major issues arise, provided they’re within the contingency timeline (often 17 days in San Diego).
3. Title Review
The escrow company ensures the seller has the legal right to sell and checks for any liens. A title insurance policy is also arranged to protect the buyer.
4. Loan Finalization
The buyer’s lender completes underwriting. Loan documents are sent to escrow for signing. Timing is key here, especially in San Diego’s competitive market.
5. Signing and Closing Disclosure
Both parties review and sign final paperwork, including the Closing Disclosure, which breaks down all costs involved in the transaction.
6. Final Walkthrough
The buyer does a last check of the home to ensure it’s in the agreed-upon condition.
7. Close of Escrow
Once funds are transferred and all documents are signed, escrow closes. The deed is recorded with the county, and the buyer receives the keys.
Common Questions About Escrow in San Diego
How Long Is Escrow in San Diego?
Escrow typically lasts 30 to 45 days, but it can be shorter or longer depending on the agreement.
Who Pays Escrow Fees?
In San Diego, escrow fees are typically split 50/50 between the buyer and the seller, but this can vary.
Can Escrow Be Delayed?
Yes. Delays can happen due to financing issues, inspection problems, or title complications. Having a proactive team like Schwarz Real Estate Group helps minimize these risks.
Why You Need an Experienced Agent
Navigating escrow involves a lot of moving parts. That’s why working with a team like Schwarz Real Estate Group is critical. We:
- Coordinate with escrow and title companies
- Track all deadlines and contingency removals
- Troubleshoot issues before they become problems
- Keep you informed every step of the way
In a fast-paced market like San Diego, missing a deadline can cost you the home. We’re here to make sure that doesn’t happen.
Final Thoughts
Escrow is one of the most important phases in your San Diego home purchase. With the right support, it doesn’t have to be stressful. Schwarz Real Estate Group will guide you from offer to keys, ensuring every detail is handled.