Buying a home in San Diego and keep hearing the word “escrow”? You are not alone. Escrow can feel mysterious when you are buying for the first time or relocating. The good news is it follows a clear process that protects both you and the seller. In this guide, you will learn what escrow is, how the timeline works in San Diego, what funds and documents you will need, and how to steer clear of common pitfalls. Let’s dive in.
What escrow means in San Diego
Escrow is a neutral third-party process that manages the exchange of funds, documents, and instructions until your home officially transfers to you. The escrow holder follows the written instructions from you, the seller, and your lender.
In California, it is common for the same company to handle both escrow and title insurance. Early in the process, you should receive a preliminary title report to review. In San Diego, financed purchases typically take 30 to 45 days to close, though every contract is negotiable and timelines can vary with the market.
Your escrow timeline
Day 0-1: Open escrow
- Your offer is accepted and escrow is opened. The escrow company is selected and assigns a file number.
- You receive escrow instructions and secure wiring information.
- Your earnest money deposit is due per the purchase agreement, commonly within 1 to 3 days of acceptance.
Days 1-10: Inspections and disclosures
- The seller delivers required California disclosures, and you receive the preliminary title report.
- You schedule inspections. Common choices include general home, termite or pest, roof, and sewer.
- If the home is in an HOA, plan time to review HOA documents. These packages can take several days to weeks.
Days 7-30: Loan and contingency decisions
- Your lender orders the appraisal and processes your loan. Underwriting timelines can vary.
- You decide whether to remove contingency protections by the deadlines in your contract. Typical contingencies include inspection, loan, appraisal, title, and HOA review.
Days 21-45: Final steps and closing
- Once your loan is clear to close and title issues are resolved, escrow prepares your final settlement figures.
- For financed purchases, you must receive the Closing Disclosure at least 3 business days before closing.
- You sign closing documents, deliver your remaining funds, your lender funds the loan, and escrow records the deed with the County Recorder. Possession and keys follow the terms in your contract, commonly at recording.
Faster or slower closings
- Cash or pre-funded deals may close in 7 to 14 days.
- Complex title issues, extensive repairs, HOA delays, or a sale contingency can extend escrow beyond 45 days.
Deposits and closing funds
- Earnest money deposit: Shows good faith and is held in escrow. It is commonly 1 to 3 percent of the purchase price, due within 1 to 3 days after acceptance, unless your contract states otherwise.
- Additional deposits: Your contract may call for an extra deposit later in escrow. Follow the exact terms you signed.
- How to pay: Escrow and lenders typically accept wires or cashier’s checks for closing funds. Personal checks are usually not accepted for final money due.
- Wire safety: Always confirm wiring instructions directly with your escrow officer using a verified phone number. Treat any emailed change to wiring details as suspicious.
Fees, title insurance, and taxes
- Escrow and title fees: These appear on your final settlement statement. Who pays which fee is negotiable and can be guided by local custom.
- Title insurance: Lenders require a lender’s policy. An owner’s policy is optional but commonly purchased for protection against certain pre-existing title issues. Who pays for the owner’s policy varies by negotiation.
- Prorations and taxes: Property taxes, HOA dues, prepaid interest, and utilities are prorated between buyer and seller at closing. Documentary transfer taxes and recording fees may apply and depend on local jurisdictions in San Diego County.
Contingencies you will manage
Contingencies are contract clauses that allow you to cancel or renegotiate within set deadlines if certain conditions are not met.
- Inspection contingency: Lets you perform inspections, request repairs or credits, or cancel within the period in your contract.
- Loan contingency: Protects you if financing is not approved. Timelines are negotiable and commonly run about 21 to 30 days.
- Appraisal contingency: If the appraisal is below the purchase price, you can negotiate, contribute extra funds, or cancel based on the contract.
- Title contingency: Gives you time to review the preliminary title report and ask the seller to address issues.
- HOA document contingency: For HOA properties, you can review CC&Rs, budgets, and rules before deciding to proceed.
- Sale-of-home contingency: If you need to sell a current home, expect a longer and more complex escrow.
Removing contingencies is a significant legal step. Only remove them when you are confident you can proceed.
Closing day, recording, and keys
You will sign the mortgage note, deed of trust, and escrow documents. Electronic signing may be available depending on your lender and escrow company. Your lender will require proof of homeowner’s insurance effective on the day of funding.
After signing, your lender wires funds to escrow. Escrow records the deed and deed of trust with the County Recorder, which completes the transfer. Escrow then disburses funds and follows the possession terms in your contract so you know exactly when you get your keys.
Avoid common pitfalls
- Watch your contingency deadlines closely and request extensions in writing if needed.
- Verify wiring instructions by phone using a known number for the escrow company. Do not rely on email alone.
- Build time for HOA document delivery and review if the property is in an HOA.
- Clarify who pays each fee in your contract to avoid surprises.
- Read disclosures carefully and order specialist inspections if something raises questions.
- Do a final walkthrough just before closing to confirm agreed repairs and property condition.
- Send funds early in the day and confirm receipt to prevent funding delays.
Quick buyer checklist
- Open escrow and send your earnest money by the deadline.
- Book inspections immediately and track contingency dates.
- Stay in close contact with your lender about appraisal and underwriting.
- Review the preliminary title report and HOA documents.
- Confirm how much you need to wire for closing and verify instructions by phone.
- Review your Closing Disclosure when you receive it and ask questions right away.
- Complete your final walkthrough and bring a photo ID to signing.
A clear plan, prompt communication, and attention to dates make escrow predictable and low stress. With the right guidance, you can move from offer to keys with confidence.
If you want hands-on support navigating escrow in North County and along the coast, connect with Adrienne Mineiro. Her local expertise, responsive communication, and coordinated team help you stay on track from offer to closing.
FAQs
How long is escrow in San Diego?
- Typical financed escrows run 30 to 45 days, while cash deals may close in 7 to 14 days depending on your contract, lender, and HOA timelines.
When is my earnest money due in San Diego escrow?
- Most contracts call for the deposit within 1 to 3 days after acceptance, but always follow the deadline in your purchase agreement.
Who pays title insurance and escrow fees in San Diego?
- These costs are negotiable and guided by local custom. It is common for terms to vary, so confirm who pays what in your contract.
What is the Closing Disclosure for a financed purchase?
- It is a final summary of your loan terms and costs that you must receive at least 3 business days before closing.
How can I avoid wire fraud during escrow in San Diego?
- Call your escrow officer using a verified phone number to confirm wiring instructions and be wary of any emailed changes to payment details.
