What Escrow Means In San Diego Home Purchases

Heard the word “escrow” tossed around and wondered what it really means when you buy a home in San Diego? You are not alone. Escrow is where most of the important steps happen, from deposits and inspections to title and recording. In this guide, you will learn what escrow is, who is involved, what it costs, and how the timeline usually flows in San Diego County. Let’s dive in.

What escrow means in San Diego

Escrow is a neutral process that carries out the terms of your purchase. A licensed escrow or title company holds your funds, gathers signed documents, orders title work, and coordinates recording of the deed once all conditions are met. The escrow holder does not advocate for you or the seller. It follows the written instructions in your contract and the parties’ addendums.

In California, escrow companies are regulated by the state. You can find consumer and licensing guidance from the California Department of Financial Protection and Innovation’s Escrow Law. Many San Diego transactions use standardized contract forms from the California Association of Realtors Residential Purchase Agreement. The exact deadlines and who pays which fees are negotiated in your contract.

Who is involved and what they do

• Escrow or title company: Holds funds, issues instructions, coordinates payoffs, and submits documents for recording.
• Buyer and seller: Provide documents, sign addendums, and perform obligations in the contract.
• Lender, if financing: Orders appraisal, underwrites the loan, and funds at closing.
• Title company: Runs the title search, clears issues, and provides title insurance.
• Agents: Keep you on track, help negotiate repairs and credits, and guide contingency removals.

Step-by-step escrow timeline in San Diego

Every contract is different, but here is what most buyers experience locally.

Open escrow and deposit

Once your offer is accepted, escrow typically opens within 1 to 3 business days. Your signed purchase agreement and contact details for your lender and agents go to escrow. You then deliver your earnest money deposit, often within a few business days based on your contract.

Most buyers in California put down about 1 to 3 percent of the purchase price as earnest money. Escrow holds these funds while you work through contingencies. If you cancel under an active contingency by the deadline, escrow returns your deposit per the contract. If there is a dispute, escrow usually needs a mutual written release or a court or arbitration order to disburse funds.

Inspections and requests for repairs

Your inspection contingency period is short, so schedule inspections quickly. Common inspections include a general home inspection, pest inspection, and any specialty checks like roof, sewer, HVAC, or pool. If you request repairs or credits, the seller can accept, counter, or decline. Agreed items are documented and sent to escrow as part of the instructions.

Appraisal and loan approval

If you are financing, the lender orders an appraisal to confirm the value supports the loan. If the appraisal is below the contract price, you and the seller may renegotiate the price, you may choose to bring additional cash, or you may cancel under your financing or appraisal contingency if it remains in place. Underwriting and appraisal clearance often take about 3 to 6 weeks, depending on the file and loan type.

Title search and title insurance

Early in escrow, the title company runs a title search to find liens, easements, and restrictions. Any liens or judgments must be cleared before closing. Most buyers purchase a lender’s title insurance policy if there is a loan and often choose an owner’s policy for added protection. For fundamentals, see the American Land Title Association guide to title insurance.

Contingency removals

Your contract lists specific deadlines to remove contingencies in writing. These commonly include inspection, loan, appraisal, and title. Track these dates closely with your agent. Removing contingencies commits you to close under the terms of the contract.

Final walk-through, signing, funding, and recording

You will do a final walk-through 1 to 3 days before closing to verify the home’s condition. Escrow then schedules your signing, either in person or electronically. Your lender wires loan funds and you bring any remaining cash to close by wire or cashier’s check per escrow’s instructions. Escrow asks the San Diego County Recorder to record your deed. Once recording is confirmed, funds are released to the seller and you receive keys.

Typical escrow timelines vary. Cash deals can close in roughly 7 to 14 days. Most financed purchases close in about 30 to 45 days. VA and FHA loans or complex title issues may take longer.

Your money in escrow: deposits and costs

• Earnest money deposit: Often 1 to 3 percent of the purchase price, held by escrow while contingencies are active.
• Buyer closing costs: These can include lender fees, appraisal, escrow and title fees, recording, prepaid taxes and insurance, and prorated mortgage interest. Buyers often see total closing costs in the range of about 2 to 5 percent of the purchase price, excluding the down payment. For a clear overview, review the CFPB overview of closing costs.
• Cash vs loan: Cash buyers skip lender-related steps, so timelines can compress. Title and HOA items still must be cleared.

Escrow cannot release funds without proper authorization. If both parties disagree on who gets the deposit, escrow may hold funds until it receives a mutual release or a legal directive.

San Diego taxes, Mello-Roos, and HOA notes

California property taxes are based on assessed value under Proposition 13, with a base rate near 1 percent plus local voter-approved assessments. In San Diego County, special assessments and Mello-Roos can appear, especially in newer communities. The exact taxes and assessments for a parcel come from the county. You can learn about assessments and payments from the San Diego County Treasurer-Tax Collector and assessed value processes through the San Diego County Assessor.

At closing, taxes and assessments are prorated as of the day you take title. If the home is in an HOA, escrow will request an HOA statement that shows dues, transfer fees, and any amounts owed. These amounts are typically paid or prorated at closing per the contract.

A practical buyer checklist

Pre-offer

• Get fully pre-approved, not just pre-qualified. Ask your lender for a written pre-approval with conditions.
• Ask your agent about earnest money norms and trusted San Diego escrow and title companies.
• Review your total cash to close, including an estimated 2 to 5 percent for closing costs.

After acceptance

• Deliver your earnest money on time and confirm escrow has opened.
• Order inspections right away to stay within your contingency period.
• Send your lender documents quickly to keep underwriting on track.

During escrow

• Track contingency deadlines and only remove them when you are satisfied.
• Review the preliminary title report and disclosures. Ask about any liens, easements, or restrictions you do not understand.
• If issues arise, work with your agent to negotiate repairs, credits, or price.

Closing week

• Do your final walk-through to confirm condition and agreed repairs.
• If you have a loan, review your Closing Disclosure at least three business days before signing. The CFPB guide to the Closing Disclosure explains each section.
• Verify wire instructions by calling a trusted, independently verified phone number. Do not rely on emailed instructions alone.

After closing

• Save your recorded deed and title insurance documents.
• Set up utilities and review any HOA welcome materials.

How your agent helps you navigate escrow

You deserve a calm, organized path to closing. A strong local agent tracks every date, anticipates title and HOA needs, and negotiates repairs or credits that keep your long-term goals in focus. In San Diego’s North County and coastal markets, that coordination often includes HOA timelines, Mello-Roos disclosures, and lender milestones that can affect closing.

You also want clear communication. Your agent should translate contract language, line by line, so you know when to remove contingencies, how to respond to appraisal results, and what to expect on signing day. If you value a hands-on partner who brings negotiation skill and a trusted network of escrow, title, lenders, and contractors to the table, reach out and start a plan that fits your budget and timing.

Ready to move forward with a guided, step-by-step plan for escrow in San Diego? Connect with Adrienne Mineiro for local expertise, clear timelines, and steady advocacy from offer to keys.

FAQs

What does escrow mean in a San Diego home purchase?

• Escrow is a neutral process where a licensed company holds funds, gathers documents, coordinates title and payoffs, and records the deed once all contract conditions are met.

How much earnest money is typical in San Diego?

• Amounts vary by market and price point, but many California buyers deposit about 1 to 3 percent of the purchase price, with timing and amount set in your contract.

How long does escrow take for San Diego buyers?

• Cash purchases can close in about 7 to 14 days, while most financed deals take roughly 30 to 45 days. Complex loans or title issues may extend the timeline.

What happens if the appraisal comes in low?

• Options include negotiating a price change, bringing extra cash, or canceling under an active financing or appraisal contingency if allowed by your contract.

Who pays escrow and title fees in San Diego?

• It is negotiable and influenced by local custom. Your purchase agreement should specify who pays which fees.

What closing costs should I expect as a buyer?

• Typical buyer closing costs run about 2 to 5 percent of the purchase price and include lender fees, appraisal, escrow and title fees, recording, and prepaid taxes and insurance.