Buying a home in San Diego is exciting, but the word “escrow” can make the process feel complicated. You want a smooth path from offer to keys, with clear steps and no surprises. In this guide, you’ll learn how escrow works in California, what to expect in San Diego, and how to protect your money and meet every deadline with confidence. Let’s dive in.
What escrow means in California
Escrow is a neutral, third‑party process that holds and distributes funds, manages document exchange, and coordinates closing tasks according to your signed purchase contract. In California, licensed escrow companies and title companies commonly act as the escrow agent for residential sales. Their job is to follow the instructions in your contract and keep both sides on track.
Escrow companies are regulated by the California Department of Financial Protection and Innovation. Standard California purchase contracts often reference escrow steps and timelines. Your specific contract controls the details, so your deadlines and responsibilities come from what you sign.
Who is involved in a San Diego escrow
Several parties work together to close your purchase:
- You and the seller give written instructions in the signed contract.
- The escrow officer opens escrow, receives your earnest money, orders title work, prepares closing figures, and records the deed after funding.
- The title company searches title and issues title insurance policies.
- Your lender orders the appraisal, sets loan conditions, and wires funds at closing if you are financing.
- Your real estate agent coordinates inspections, timelines, repairs, and communication so you stay on schedule.
Local custom guides some choices in San Diego, but nearly everything is negotiable and must be written into the contract. Your agent can help you select a locally experienced escrow and title team that knows San Diego County recording procedures.
Typical San Diego escrow timeline
Most California escrows run about 30 to 45 days. Shorter or longer timelines are possible if both parties agree. Here is a sample 30‑day flow so you know what to expect:
- Day 0: Your offer is accepted and escrow is opened.
- Days 1–3: You deposit your earnest money and complete your loan application if needed.
- Days 3–10: You review seller disclosures and schedule inspections. This is typically the inspection contingency period.
- Days 7–21: Your lender orders the appraisal. Title work is prepared.
- Days 10–21: You negotiate repairs or credits based on your inspections, then decide whether to remove inspection contingencies or cancel per your contract.
- Days ~21–28: Underwriting issues final conditions. You and the lender satisfy all outstanding items.
- Days ~28–30: You receive “clear to close,” escrow balances your final figures, lender funds the loan, the deed is recorded, and you get keys after recordation.
Always track your exact deadlines, including whether days are counted as calendar or business days. The purchase contract defines this.
Earnest money, good funds, and closing costs
Your earnest money deposit shows good faith and is credited back to you at closing. The amount varies by price point and market conditions. Many contracts require you to deposit within 2 to 3 days of acceptance. Escrow will hold your funds in a regulated account and follow the written instructions in your contract.
If you cancel within your contingency periods according to the contract, your earnest money is typically returned. If you default, the outcome depends on contract provisions. Ask questions early so you understand how your specific agreement handles remedies.
Escrow requires verified “good funds” to close. That usually means a wire transfer or cashier’s check that meets the escrow company’s policy. Your lender also wires loan funds on funding day. Recording happens after funds arrive and are confirmed.
Buyers usually pay for loan-related fees, the lender’s title policy, escrow fees if split, recording fees, prorated property taxes, HOA transfer fees if applicable, homeowner’s insurance, and other miscellaneous items. In Southern California, sellers commonly pay for the owner’s title policy and buyers pay for the lender’s policy, but this is a custom and is negotiable. Confirm who pays what in your contract.
Contingencies: inspection, appraisal, and loan
Contingencies protect you by giving you time to investigate, confirm value, and finalize financing.
- Inspection contingency: You can inspect the home and request repairs or credits, or cancel within the contingency period if needed. Common inspections include general home, roof, HVAC, pool, sewer, and a wood‑destroying organism inspection with a separate pest report.
- Appraisal contingency: If you are financing, your lender orders the appraisal. If the appraised value comes in low and you have an appraisal contingency, you can renegotiate, bring additional funds, or cancel. If you waived the appraisal contingency, you accept the risk of a short appraisal.
- Loan contingency: If your lender cannot approve your loan within the contingency period, you can cancel per the contract and typically recover your earnest money.
Know your dates, because once you remove a contingency, your earnest money may be at risk if you later cancel without a contractual right.
Title search and title insurance
The title company runs a search to find liens, judgments, easements, or defects. You will receive a preliminary title report that outlines recorded matters affecting the property. It is important to read and ask questions about anything you do not understand.
Two common policies are involved. The owner’s title policy protects the new owner, and the lender’s title policy protects the lender. Who pays for each is guided by local custom and your contract. Common title issues include unreleased liens, name discrepancies, unrecorded easements, probate matters, or HOA assessments. Your escrow and title teams will work to clear items before closing.
Disclosures and HOA documents
California sellers must provide required disclosures such as the Transfer Disclosure Statement and Natural Hazard Disclosure. You may also receive lead‑based paint disclosures, any relevant death‑in‑home disclosure, HOA documents, and information on earthquake or flood hazards where applicable.
If the home is part of an HOA, escrow typically orders the HOA package. You have a statutory period to review HOA documents. Watch for CC&Rs, rules, budgets, assessments, and any transfer fees that affect your decision and closing costs. Review these early so you can keep your contingency timeline on track.
Closing day, recording, and keys
Once your loan is cleared and escrow has good funds from you and your lender, the deed is sent for recording with the San Diego County Recorder. Timelines can vary by day and volume. After the deed records, escrow confirms that you are on title and keys are released according to your contract.
Plan your move after recordation, not just after signing. Signing is a step, but recording is the legal transfer of ownership.
Wire fraud safety steps
Wire fraud is a real risk in real estate closings. Protect yourself with simple habits:
- Never accept wiring changes by email alone.
- Call your escrow officer at a known, verified phone number to confirm wiring details before you send funds.
- Use secure portals and two‑factor authentication when available.
- Verify your final cash‑to‑close with escrow directly, then send the wire the same day if possible.
A quick phone call can save you from a costly mistake.
Common San Diego buyer pitfalls to avoid
- Missing contingency deadlines. Put every date on your calendar and ask escrow to provide a running timeline at the start.
- Underestimating closing costs. Ask your lender for early estimates of cash to close and update them after the appraisal and any repair credits.
- Relying on unverified wiring details. Always verify by phone with escrow before sending funds.
- Assuming local “customs.” Confirm in writing who pays for title policies, transfer taxes, and escrow fees.
- Waiving contingencies too early. Understand the risks before you remove inspection, appraisal, or loan protections.
- Delaying HOA review. Start reviewing HOA docs as soon as they arrive and ask questions quickly.
Smart questions to ask your escrow officer and agent
- When do I have to deliver my earnest money, and what payment methods are acceptable?
- Which title and escrow companies are we using, and who pays which fees in our contract?
- What are my exact contingency deadlines for inspection, loan, appraisal, HOA, or sale of my current home?
- What are your verified wiring procedures so I can avoid fraud?
- Which items will be prorated at closing, and how will they show on my settlement statement?
- After funding, how long does San Diego County recording usually take, and when will I receive keys?
How we help San Diego VA and relocating buyers
If you are active‑duty, a veteran, or relocating on a tight PCS timeline, you want a team that explains each step, aligns your escrow with your move date, and keeps you ahead of every deadline. We coordinate with your lender, schedule inspections promptly, and keep title, escrow, and HOA documents moving so you can remove contingencies with confidence.
You can tour virtually, review disclosures early, and sign securely from anywhere. If you want a calm, on‑time closing with clear expectations, connect with Alanna Strei to book your free VA relocation consultation.
FAQs
What is escrow in a California home purchase?
- Escrow is a neutral, licensed third party that holds funds, manages documents, and coordinates closing according to your signed contract.
How long does escrow take in San Diego?
- Most escrows run about 30 to 45 days, although shorter or longer timelines are possible if both sides agree.
When is my earnest money due in California?
- Many contracts require you to deposit within 2 to 3 days of acceptance, but the exact deadline and amount are set in your purchase agreement.
Who pays for title insurance in Southern California?
- It is common for sellers to pay the owner’s policy and buyers to pay the lender’s policy, but this is a custom and fully negotiable in the contract.
What happens if the appraisal is low in California?
- If you have an appraisal contingency, you can renegotiate, bring more cash, or cancel; if you waived it, you accept the risk of a short appraisal.
What disclosures will I receive in San Diego?
- You typically receive the Transfer Disclosure Statement, Natural Hazard Disclosure, and any required additional disclosures, plus HOA documents if applicable.
When do I get keys after closing in San Diego?
- After funds are received and the deed records with the county, escrow confirms recordation and keys are released according to your contract.
