From Accepted Offer to Keys: What Actually Happens in Escrow

The call comes in with the good news everybody's been waiting on. Your offer is accepted. And then, more often than not, the next question is some version of: all right, so what happens now?

That's a question worth answering before the offer goes in, not after. For most people this is the biggest investment of their life, and the moment the contract comes back signed, a clock starts running that nobody explained.

Plenty of buyers get through it on instinct, and over 36 years I've watched that work out. But instinct isn't a plan, and going into escrow without understanding the process is a bad idea.

So here's the whole thing, in order. Print it if that helps.

Escrow opens on the contract, and the contract runs the deal

A purchase contract is fully executed when it's been signed by you, by the seller, and by both agents. Not when the seller says yes over the phone. Not when your agent texts good news. Signed, all the way around.

From that moment the contract runs everything. Escrow opens on it, and the escrow officer takes instruction from it. Every date and obligation on either side comes out of that document. If a term isn't how you want it, fix it before signatures.

Paperwork then moves both directions: the California Association of Realtors forms our industry uses statewide. Your agent sends documents to the listing agent, and the listing agent sends documents back to you, including the transfer disclosure statement and the seller property questionnaire.

Escrow sends its own instructions for you to complete and sign. Your agent can help you fill them out, or you can go into the escrow office and do it in person with the escrow officer. If anything on those pages is unfamiliar, go in person and walk it line by line. Nobody there thinks less of you for asking.

The calendar is the most important document in your file

Here's what I most want you to take from this article. The moment your offer is accepted you're on a timetable, and every deadline counts from that date.

Your contingency periods run off it: how long you have to complete inspections, return escrow paperwork, and satisfy your loan contingency. Most purchase contracts are written for 30 days, with 45 the next most common, and some out to 60. That's your window.

So on day one, sit with your agent and pull every date out of the contract onto a calendar you actually look at. Not in a drawer. On the refrigerator, or in your phone with alarms set. It's been my experience that the deals that get tense are rarely the ones with a real problem. They're the ones where somebody lost track of a date.

Lock the loan the day the contract is executed

Call your loan officer the day your contract is fully executed. They'll ask whether you'd like to lock your loan. An extended lock before you've found a property is possible and worth asking about, but most people lock once the contract is executed.

My recommendation, from experience rather than as a rule: take the lock and hold it the entire escrow. Don't play the market with your own transaction. If rates move against you mid-escrow, your payment goes up, your debt ratio with it, and that can put the purchase at risk.

On the day you lock, ask two questions plainly: what is my interest rate, and what does this lock cost me? Write both answers down with the date beside them. You'll need that page later.

The inspection and the appraisal: start both immediately

These are the two most common reasons a well-qualified buyer's deal falls apart. Not credit. Not income. These two. Start both as fast as you can, so if there's a problem you find it while you still have options.

The home inspection. Unless the home is brand new, I don't think anybody should buy without one. Sellers complete a transfer disclosure statement and a seller property questionnaire in good faith, to the best of their knowledge. An inspector still routinely finds things they never knew about, including roof deterioration nobody can see from the ground.

When the report comes back you have choices. Accept the property as it is. Or have your agent prepare a request for repairs, which goes two ways: ask the seller to do the work, or ask for a monetary settlement so you can hire your own people.

The seller can also decline. If they won't repair and won't settle, you decide whether to proceed anyway or cancel within your contingency period and get your deposit back. A perfectly good deal can end right there, with a buyer who did nothing wrong.

The appraisal. Order it immediately. An independent appraiser gives your lender an opinion of value, because the lender is lending against the house, not only against you. If the appraisal comes in below the contract price, you have a decision: ask the seller to reduce the price, cover the difference yourself if your funds and program allow, or meet in between. If the parties can't agree, the deal may cancel under your contract's terms.

Processing, underwriting, and the Closing Disclosure

Once your escrow paperwork is in, the inspection is behind you, and the appraisal is done, you're generally past the hardest part. A transaction that clears those two hurdles usually goes on to close, absent something extraordinary like a job loss. I can't say guarantee. But that's where I exhale a little.

Now the work moves inside the lender. Your file goes to a processor, who assembles what's needed, then to an underwriter, who verifies income and assets, reviews credit and the appraisal, and applies program guidelines. All loan decisions remain subject to final underwriting.

Before final loan documents are issued, one document reaches your email first: the Closing Disclosure, which we just call the CD. It lays out your loan terms, your payment, and your closing costs in final form.

The Consumer Financial Protection Bureau's guidance, last reviewed 2 May 2023, says your lender must give you the Closing Disclosure at least three business days before closing.¹ Use that time. This is your chance to compare the final terms and costs against the Loan Estimate and ask questions before the closing table.

Here's what to do the minute it lands, and it's the step people skip. Pull out the page where you wrote your rate and costs on lock day and compare. The rate should be the rate you locked, and the principal and interest payment should be the payment you were quoted. If they don't match, call your loan officer before you sign anything.

There are legitimate reasons the total payment can land differently. Insurance or property taxes may have come in different than estimated. Both sit in the impound portion, the amount your lender collects monthly to pay taxes and insurance for you. Principal and interest should not move, because that's the piece your locked rate controls.

Signing, funding, recording, and the keys

Once you've signed the CD, the lender issues your final loan documents and escrow calls you in to sign. Two get signed in front of a notary: the grant deed, which transfers ownership to you, and the deed of trust, which secures the lender's lien. Both must be notarized before the county will record them.

Then escrow asks you to wire the balance of your funds. Unglamorous advice: call your escrow officer at a number from your own records and confirm the wire instructions by voice first. Criminals target this exact moment.

From there it runs quickly:

• Your escrow officer packages the final documents, part back to the lender and part toward recording.
• The lender reviews the package and funds the loan.
• The escrow officer notifies everyone the loan has funded.
• The deeds go to the county recorder's office and are recorded.
• The escrow officer receives confirmation of recording.

That confirmation is the moment: recording makes your ownership public record.

Let me say something I mean sincerely. Escrow officers are the unsung heroes of our business. They hold the money and the documents, chase every condition, and coordinate people who are all in a hurry, file after file. People have no idea how hard they work. When yours calls to congratulate you, congratulate them back.

One note on timing. Recording day and moving day aren't always the same. It's very common for a seller to negotiate a short period after closing to move out, sometimes the same day and sometimes a few days, all agreed in writing before closing. Possession is a term the two parties settle between themselves. Once they're out, you move in.

Two things to handle once you're a homeowner

Switch the utilities into your name promptly. Water, power, gas, trash, whatever the property uses. Call before move-in if you can. It's the most ordinary item here and the easiest to forget.

Expect a one-time supplemental property tax bill. In California, property taxes are based on assessed value, and a sale triggers a reassessment at your purchase price. The prior owner's bill was based on a different basis, sometimes a much older one, so the year's regular bill went out on their number. After your sale records, the county issues a separate, one-time bill for the difference over the rest of the tax year.

It arrives separately from the regular tax bill, often months after closing, and is usually split into two installments. Even with an impound account it isn't always paid from it, so confirm with your lender and county tax collector.

It's one time, not a permanent increase, and it isn't a mistake. But it's a real bill with a real due date, and it catches people off guard.