Escrow: Now What?
Congratulations! Your offer was accepted and you’re now in escrow! This is an exciting time, and you’re one step closer to homeownership! Rest assured that you’ll be in great hands with our team, and we’ll always be working hard to ensure your best interests.
At this point, you’re probably thinking, “That’s great, but what happens now?” We’ve put together this handy guide showing some frequently asked questions to address your typical questions and concerns:
1. Can you give me a general outline of the escrow process?

2. What is escrow's role in the transaction?
Escrow is the neutral party in the transaction. They are the holder of the documents and monies. They also work with the lender and coordinate the signing of the buyer’s loan docs once the documents are received.
The escrow officer will reach out to you to provide wiring instructions for your earnest money deposit, your escrow package, and to schedule the signing of loan docs.
3. How does the inspection process work?
Per paragraph 14.B.(5) of the Residential Purchase Agreement, the buyer is allowed access to the property to conduct inspections and investigations. The standard time period that the buyer is allowed access is for 17 days after the offer is accepted.
In most cases, the buyer will elect to schedule a general home inspection, which is typically attended by the buyer, the buyer’s agent, and the listing agent. It is not customary for the seller to attend this inspection. Generally, the home inspection will take between 2-3 hours to complete, but can last up to as long as 5 hours.
Sometimes, the general home inspector may recommend a follow-up inspection from a specialist. For example, there may be a concern with the roof where the inspector recommends a licensed roofer for further review.
4. What happens if something alarming is found during the inspection?
First, it’s important to remember that no home is perfect and, unless you’re buying a brand new build, you are buying a “used” home. It is incredibly common that the home inspection reveals something that was not already known to the owner. In general, we are looking for major issues that may be costly to remediate and safety concerns.
If a major issue is revealed during the inspection, it is common to submit a repair request to resolve the issue or a credit to cover the cost of fixing it. Typically there is a negotiation process for repairs.
Alternatively, if the buyer and seller are unable to come to an agreement on repairs (if any are requested), the buyer could also have the option to cancel the agreement and reclaim their earnest money deposit as long as the inspection contingency has not already been removed.
5. Are there any repairs that are required to be done by the seller?
Generally, no. The Residential Purchase Agreement is quite clear that the property is sold ‘“AS-IS” in its PRESENT physical condition as of the date of Acceptance’ (paragraph 11 of the RPA). It depends on how the contract was written but, in general, the only repairs the seller is required to do is installing smoke and carbon monoxide detectors and bracing the water heater to code.
6. Can I back out of the deal if I want to?
Generally, a buyer has the option to cancel a transaction for a number of reasons. The most common reason for a cancellation is that something is revealed during an inspection that makes the buyer uncomfortable and the buyer and seller are unable to come to an agreement on a repair request, credit, or reduction in price. Other common reasons include the buyer being unable to secure a loan, or the appraisal coming in low, but there are a number of other possibilities.
If the buyer decides to back out, they must provide a contractually permitted reason. For example, as long as they have not already removed their inspection/investigation contingency, they can decide that the condition of the home is not a fit for them. As long as the buyer has not removed their contingencies, they have the option to cancel the agreement and reclaim their earnest money deposit which was held in escrow.
Once the buyer has removed all of their contingencies, they would be at risk of forfeiting their deposit if they then tried to cancel the transaction. We will never advise you to remove your contingencies until we consider it safe to do so.
7. What are contingencies, and how do they work?
A contingency is a condition in a real estate contract that must be met within a certain time period. For example, a buyer may agree to purchase a seller’s home with the contingency that the buyer may conduct investigations into the condition of the property for 17 days after the offer has been accepted. By the end of the 17th day, the buyer would then have the contractual obligation to remove that contingency in writing, meaning that the agreement is no longer contingent upon the buyer’s investigations of the property.
The most common contingencies, along with their standard time periods, can be found below. Please note that the contingency periods for your escrow may differ.
- Inspection/Investigation: 17 days
- Appraisal: (appraisal must come in at or above the sale price, or buyer has the option to cancel the agreement): 17 days
- Loan: 21 days
8. How does the loan process work?
Throughout the transaction the buyer will be in contact with their loan officer and perhaps others at the bank that is providing their loan. The loan officer may ask for several documents, including tax returns, proof of income, etc. As your agent, we are also in direct contact with the loan officer for updates.
Once the requested documents are received, they will be sent to the lender’s underwriting department where the file will be reviewed in its entirety. This process is entirely out of your agent’s control and is the most common cause of delays in the transaction process.
If the file is approved, the lender will draft up loan documents, which are then typically signed at the escrow office, and the home closes escrow shortly after.
9. What if the seller wants to cancel the deal?
In order for the seller to cancel the agreement with the buyer, two things must happen:
1. The buyer must have failed to remove a contingency or perform a specific contractual obligation within the time period specified in the agreement.
2. The seller must have delivered to the buyer, in writing, a Notice to Buyer to either remove the applicable contingency or perform the contractual obligation specified in the Notice.
If the buyer has not taken the action specified in the Notice within 2 days after delivery, the seller may cancel the agreement, and the buyer’s earnest money deposit will be returned to the buyer.
For example, if the agreement states that the buyer must remove their inspection contingency within 17 days and that contingency has not been removed by the end of the 17th day, the seller may deliver a Notice to Perform to remove that contingency, and if it has not been removed within 2 days after delivery, the seller may cancel the agreement.
10. What happens if there is a delay of the close of escrow date?
Unfortunately, a delay of the close of escrow date is extremely common, but the cause of the delay is important. The most common cause of a delay is that the lender is unable to have the loan fully approved and loan docs sent to escrow by the scheduled close date.
In the event that this happens, it is common for the buyer and seller to negotiate an extension, and oftentimes the buyer compensates the seller in exchange for the extension.
A delay caused by the buyer (even if it is ultimately due to the lender) would be considered a buyer’s default of the contract. The seller could send a Demand to Close Escrow, which is a notice to the buyer to immediately close escrow. If the buyer does not close escrow within the timeframe noted in the Demand (typically 3 days), the seller would then have the option to cancel the Agreement and the buyer would be at risk of forfeiting their deposit.
This is it is incredibly important to work with a competent, communicative loan officer who will notify all parties immediately if a delay is suspected, which helps to avoid a difficult situation at the last minute.
11. Do I have to be here when the home closes escrow?
Absolutely not! Our clients are often out of state, or even out of the country, on the date the home closes escrow. As long as all of your escrow paperwork has been returned, you do not physically need to be here. We will arrange the transfer of keys when you are ready.
If you have questions or are ready to begin the home buying process, just complete the form below, and a member of our team will be in touch shortly!

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