Escrow: The Final Stretch Before You Get the Keys

In San Jose's high-paced real estate market, the moment your offer gets accepted is thrilling—but it’s not the finish line. That’s when you enter escrow: the period between contract acceptance and officially becoming the homeowner.

While it may sound like just paperwork and waiting, the escrow process is where the most important legal and financial steps happen. Understanding what goes on during this time helps you stay prepared, avoid delays, and keep your stress level down.

Let’s walk through what escrow really means in California, what happens during each phase, and how long you can expect it to take in San Jose.

What Is Escrow in California?

Escrow is a neutral third-party process designed to protect both the buyer and the seller during a real estate transaction. In California, the escrow company:

• Holds funds (like the buyer’s deposit)

• Oversees the exchange of documents

• Ensures all contract terms are fulfilled

• Coordinates with lenders, title companies, and agents

• Handles the final closing and disbursement

Think of escrow as a bridge between acceptance and ownership, where all the moving parts come together before the deal officially closes.

The Role of the Escrow Company

The escrow company acts as a neutral facilitator, and their duties include:

• Opening and managing the escrow account

• Holding the buyer’s earnest money deposit

• Communicating with the title company, lender, and agents

• Coordinating the signing of documents

• Disbursing funds after closing

• Ensuring everything complies with California real estate law

Most San Jose buyers will work with an escrow officer selected by the listing agent’s preferred title company, unless negotiated otherwise in the purchase agreement.

Key Steps in the Escrow Process (San Jose Edition)

Here’s a typical step-by-step breakdown of what happens during escrow in a San Jose home purchase:

1. Escrow Is Opened

After the seller accepts your offer:

• The purchase agreement is sent to the escrow company.

• The buyer submits the initial deposit, often 1–3% of the purchase price.

• Escrow formally “opens” and the clock starts ticking on all deadlines.

2. Title Search & Preliminary Title Report

The escrow company works with the title company to:

• Perform a title search to uncover liens, encumbrances, or ownership issues.

• Issue a preliminary title report (usually within the first week).

You’ll review this report with your agent to ensure there are no red flags—like unpaid taxes, old loans, or boundary disputes.

3. Inspections & Appraisal

This is the due diligence period, where you:

• Schedule a home inspection, pest inspection, and possibly sewer or roof inspections.

• Your lender orders an appraisal to verify the home’s value.

Any findings can lead to repairs, credits, or renegotiation—especially in homes older than 20 years, which are common in San Jose.

4. Loan Approval (If Financing)

Your lender will:

• Verify income, assets, and credit

• Review the appraisal

• Finalize your loan underwriting

Once approved, you’ll receive a Clear to Close, meaning the lender is ready to fund your loan.

This step typically happens 2–3 weeks into escrow, assuming no major delays.

5. Sign Closing Documents

As escrow nears completion:

• You’ll receive a Closing Disclosure (CD) with your final loan terms and closing costs.

• You’ll meet with a notary to sign the loan documents, deed of trust, and other disclosures.

This typically happens 3–5 days before closing. California law requires a waiting period between signing and funding.

6. Final Walkthrough

Usually 1–2 days before closing, you and your agent will:

• Verify the home’s condition matches what was agreed upon

• Ensure any repairs have been completed

• Confirm that fixtures and appliances remain

This is your last chance to flag any issues before funds are transferred.

7. Closing & Funding

Once the lender approves and reviews all signed documents:

• The loan is funded

• Escrow receives the money

• The title company records the sale with Santa Clara County

After recording, the home is officially yours—and your agent hands over the keys.

How Long Does Escrow Take in San Jose?

The typical escrow timeline in San Jose is 21 to 30 days, though it can vary depending on:

• Whether the buyer is paying cash or using a loan

• The lender’s processing speed

• The complexity of the transaction

• Whether contingencies (appraisal, loan, inspection) are waived or removed quickly

Fastest Timeline:

10–15 days for all-cash offers

Standard Timeline:

21–30 days with financing

Common Escrow Delays (and How to Avoid Them)

Even smooth escrows can hit bumps. Some common delays include:

• Incomplete or late loan documents

• Appraisal coming in below purchase price

• Title issues (e.g., liens or unresolved ownership)

• Missed signature or document errors

• Delay in wiring final funds for closing

Pro Tip:

Stay responsive to emails and document requests. The faster you return items, the smoother escrow will go.

What Buyers Should Watch For During Escrow

✅ Track your contingency deadlines
Make sure you know when inspection, loan, and appraisal periods expire.

✅ Don’t make big financial changes
Avoid new credit cards or large purchases until after closing.

✅ Double-check your closing funds
Confirm wire instructions directly with escrow—this protects you from wire fraud.

✅ Ask questions early
If something in the title report, loan docs, or appraisal seems off, flag it right away.

Escrow Is Where the Details Matter Most

The escrow process in San Jose may not be glamorous—but it’s one of the most important parts of buying a home. It’s where your dream becomes a reality—or where deals can fall apart if mismanaged.

By understanding the steps, staying organized, and working with an experienced agent and lender, you can move through escrow with confidence—and collect your keys right on time.