Ready to buy in Point Loma Heights but not sure how escrow actually works in California? You are not alone. Escrow can feel complex when you are balancing inspections, loan steps, and timelines. This guide breaks it down so you know what to expect, who does what, and how to keep your closing smooth. Let’s dive in.
What escrow means in California
Escrow is a neutral third party that holds funds and documents, follows the purchase contract, and only releases money when all conditions are met. The escrow officer prepares instructions, coordinates signings, records the deed, and disburses funds after recording.
Escrow works closely with the title company. Title reviews the property’s record, issues the preliminary title report, handles any curative work, and provides title insurance policies at closing. In California, escrow agents are licensed and regulated, and title insurance is regulated under insurance law.
How long escrow takes
Your contract sets the timeline. Most financed purchases close in 30 to 45 days to allow for appraisal and underwriting. Cash deals can be faster, often 7 to 21 days, if title is clear and seller paperwork is ready.
Shorter escrows are possible, but only if inspections, disclosures, and lender steps can be completed on schedule. County recording calendars and HOA document delivery can also affect the path to closing.
Who does what in escrow
- Escrow officer: Opens the file, receives your deposit, coordinates documents, calculates prorations, schedules recording, and disburses funds.
- Title officer: Runs the title search, issues the preliminary title report, clears liens or encumbrances, and issues title insurance policies.
- Lender: Manages your application, orders the appraisal, underwrites, and wires loan funds when you are clear to close.
- Your agent: Orchestrates communication, tracks deadlines, requests disclosures, and helps you negotiate items within your contingencies.
- Attorneys: Not typically required in California residential deals, though some parties involve counsel for complex situations.
Your escrow timeline: step by step
Step 1: Open escrow and deposit
You sign the contract and open escrow. You send your initial deposit as the agreement specifies. Escrow orders the preliminary title report and requests seller disclosures and HOA packets if applicable.
Step 2: Review disclosures and start inspections
You receive the Transfer Disclosure Statement, the Natural Hazard Disclosure report, and other required forms. For pre‑1978 homes, expect a lead‑based paint disclosure. Schedule a general home inspection and any specialized checks such as pest, sewer, roof, or HVAC.
Step 3: Appraisal and loan underwriting
If you are financing, the lender orders the appraisal during your loan contingency window. You provide updated documents to underwriting. Delays here often extend escrow, so respond quickly to lender requests.
Step 4: Title and HOA review
Read the preliminary title report and raise questions early. For condos or HOA homes, review CC&Rs, budgets, reserves, rules, and any known special assessments within your review period.
Step 5: Final numbers and Closing Disclosure
Your lender must deliver the final Closing Disclosure at least three business days before you sign loan documents. Escrow provides a settlement statement so you can see your funds to close and all prorations.
Step 6: Signing and funding
You sign loan documents and closing papers, often with a notary. Your lender wires funds to escrow once conditions are satisfied. You wire your remaining funds only after confirming instructions directly with escrow by phone.
Step 7: Recording and keys
Escrow records the grant deed with the county. If you have a loan, the deed of trust records as well. Once recording is confirmed, escrow releases funds and you get keys per the contract.
Funds, fees, and wires
- Deposits: Your initial deposit is held in escrow and credited to your purchase at closing. Some contracts include further deposits later in the process.
- Prorations and payoffs: Escrow prorates property taxes, HOA dues, and other items to the closing date. Any existing liens or loans are paid from seller proceeds to clear title.
- Fees and who pays: Escrow and title fees, transfer taxes, and recording charges are negotiable in California. Your contract and local custom determine the split.
- Wires: Only wire funds after you receive final figures. Always verify wire instructions by calling your escrow officer at a known phone number. Email-only instructions can be spoofed.
Disclosures and contingencies to expect
- Seller disclosures: Transfer Disclosure Statement, Seller Property Questionnaire, and any local forms.
- Natural Hazard Disclosure: Reviews items like flood zones, seismic hazards, and fire hazard severity. Coastal factors are especially relevant in Point Loma Heights.
- Lead-based paint: Required for homes built before 1978.
- HOA documents: CC&Rs, budgets, rules, insurance, and reserve studies if the home is in an HOA.
- Pest and inspection reports: Common in coastal San Diego. Repairs and credits are negotiated.
Common contingencies include inspection, loan, appraisal, title, and HOA review. Your rights and deadlines are governed by your purchase agreement, so track those dates closely.
What closes your deal
You will see a grant deed, escrow instructions and settlement statements, and if you have a loan, a deed of trust and the federal Closing Disclosure. Title issues the final owner’s and lender’s policies at closing. Escrow files any county forms, such as the Preliminary Change of Ownership Report, when recording.
Point Loma Heights buyer tips
- Prioritize hazard review: Coastal proximity can bring flood, tsunami evacuation, bluff stability, seismic, and fire hazard factors in the NHD report. Ask questions early.
- Expect older-home nuances: Many homes were built before 1978. Plan for lead disclosure and thorough pest and systems inspections.
- Confirm permits for improvements: Coastal work may involve additional permits or Coastal Commission review. Unpermitted work can affect title or insurance.
- Scrutinize HOA health: For condos or HOA homes, review reserves and any special assessments early. These can affect approvals and monthly costs.
- Price insurance early: Coastal exposure may influence availability and cost. Standard homeowners policies do not cover flood or earthquake. Separate policies may be needed.
Example timelines
- Local buyer with a conventional loan: 30-day escrow with a 17-day inspection window. Appraisal and underwriting complete around day 24. Closing Disclosure delivered at least three business days before signing. Record and fund on day 30.
- VA or FHA buyer relocating: Plan for 30 to 45 days to allow appraisal, underwriting, and remote signing. Coordinate HOA documents and insurance earlier in the process.
- Cash buyer wanting speed: 7 to 14 days is possible if title is clear and the seller is ready. You still need inspections and recording time.
Buyer checklist to reduce surprises
- Deliver your initial deposit quickly to open escrow.
- Book inspections right away and attend if you can.
- For HOA properties, request the full packet immediately and review it within your contingency period.
- Provide your lender documents early and respond fast to conditions.
- Get homeowners, flood, and earthquake quotes early.
- Call escrow to verify wire instructions before sending funds.
- Ask escrow for a preliminary settlement statement a few days before signing.
Next steps
A steady, well-communicated escrow keeps your Point Loma Heights purchase on track and stress down. If you want senior-level guidance, local insight, and a calm path to closing, connect with Craig Lotzof to schedule a private market consultation.
FAQs
Who holds my earnest money in California escrow?
- Your deposit is held by the escrow company in a trust account and credited to you at closing per your escrow instructions.
How long does escrow typically take in San Diego?
- Most financed purchases close in 30 to 45 days, while cash transactions can close in 7 to 21 days if title is clear and documents are ready.
What happens if the appraisal is lower than the price?
- You can renegotiate, increase your down payment to cover the gap, or cancel if your contract includes an appraisal or loan contingency.
Which disclosures should I expect as a Point Loma Heights buyer?
- Expect the Transfer Disclosure Statement, Natural Hazard Disclosure, lead-based paint for pre-1978 homes, and full HOA documents if applicable.
When will I receive final closing numbers?
- Your lender must provide the Closing Disclosure at least three business days before signing, and escrow will issue a settlement statement with funds to close.
Who pays escrow, title, and transfer taxes in California?
- These are negotiable. Your purchase agreement and local custom determine how fees are split between buyer and seller.
