Buying a home in Cow Hollow or greater San Francisco comes with a word you hear a lot: escrow. It can feel mysterious, especially if you are new to California contracts or relocating from out of state. You want to know where your money goes, what to sign, and when it all becomes official. This guide walks you through escrow step by step so you can plan your timeline, protect your deposit, and close with confidence. Let’s dive in.
Escrow basics in California
Escrow is a neutral, third party that holds money and documents until both sides meet the terms of the purchase contract. In California, escrow manages title clearance, receives your funds and the lender’s wire, coordinates signing, and arranges deed recording. Once the deed records, you own the home and escrow releases funds.
Who does what
- Buyer: deposits earnest money, reviews disclosures, completes inspections, removes contingencies, signs and brings final funds.
- Seller: provides disclosures and deed, clears title issues, and signs closing documents.
- Escrow officer: follows written instructions, holds money and documents safely, prepares settlement statements, and coordinates recording.
- Lender: underwrites the loan, issues conditions and closing instructions, and wires loan funds.
- Title company: researches ownership and liens, clears issues, and issues title insurance.
- Real estate agents: negotiate terms, guide deadlines, and deliver the contract to escrow.
Escrow vs. title vs. closing
- Escrow is the process and trust account that holds funds and paperwork.
- Title refers to legal ownership and title insurance.
- Closing, or close of escrow, is the transfer of ownership at recording and final disbursement of funds.
Step-by-step escrow timeline
Every deal follows its contract, but most California transactions run through similar stages. Many San Francisco closings happen in 30 to 60 days. All-cash can be faster. Complex loans or HOA reviews can take longer.
Step 0: Offer accepted
You and the seller sign the purchase agreement. It sets key dates like your initial deposit deadline, contingency removal dates, and the target close. You deliver your earnest money to escrow by check or wire, following the contract and escrow’s instructions.
Step 1: Escrow opens
The escrow officer sets up the file, deposits your earnest money in a trust account, and orders title work. You will receive an opening package, contact details, and a draft timeline of next steps.
Step 2: Contingency periods
You inspect the home, review seller disclosures, and confirm HOA documents if it is a condo. Your lender orders an appraisal. You can request repairs or a credit based on findings. You either remove contingencies in writing and move forward, negotiate, or cancel within the allowed windows.
Step 3: Loan underwriting
If you are financing, your lender finalizes underwriting and issues clear-to-close after you meet all conditions. They send closing instructions and the loan package to escrow.
Step 4: Title clearance
The title company provides a preliminary title report that shows ownership, liens, easements, and exceptions. Escrow and title work with both sides to resolve any issues before closing.
Step 5: Signing
Escrow prepares your closing statement and coordinates signing. Buyers sign loan documents and final instructions. Sellers sign the grant deed and required forms. Notarization and valid ID are required.
Step 6: Funding and closing
You wire your cash to close to escrow. Your lender wires loan funds. Escrow verifies all conditions are satisfied, disburses funds according to the settlement statement, and submits documents for recording.
Step 7: Recording and keys
The county records the deed and any loan documents. Once recorded, escrow confirms close of escrow and releases keys or possession as your contract specifies. Title insurance is issued after recording.
Money: deposits and closing funds
Your initial deposit, sometimes called earnest money, shows good faith. In many markets the initial deposit is negotiated and often ranges around 1 to 3 percent of the purchase price. In competitive neighborhoods like Cow Hollow, some buyers offer a larger deposit or add a second deposit after acceptance to strengthen their offer. The contract controls how escrow holds the deposit, when it applies to your purchase, and when it may be forfeited.
Your cash to close is the remainder due at funding. It includes your down payment and buyer closing costs, minus your deposit and any credits, plus lender fees and prorations.
- Buyer costs often include lender fees, appraisal, recording fees for the mortgage, title insurance for the lender, and a share of escrow fees.
- Seller costs often include transfer taxes, a share of escrow fees, owner’s title policy, payoff of existing loans or liens, and agent commissions. These are negotiated and may vary by local custom.
- Prorations typically adjust property taxes, HOA dues, and rents or utilities as of the closing date.
Illustrative example only
- Price: 1,500,000
- Initial deposit: 30,000 (2 percent)
- Additional deposit after acceptance: 20,000
- Loan at 80 percent loan-to-value: 1,200,000
- Cash to close: 1,500,000 minus 50,000 deposits minus 1,200,000 loan equals 250,000, plus estimated buyer closing costs of 8,000 equals 258,000
Actual amounts depend on your contract and lender. Escrow will provide a final settlement statement so you know the exact wire amount.
Contingencies and deadlines
Contingencies protect you while you verify key items. Common ones include inspection, financing, appraisal, title review, HOA and CC&R review for condos, and sometimes the sale of your current home. Your contract sets deadlines to remove each contingency in writing.
Removing a contingency means you commit to proceed even if that issue later changes. If you cancel for a reason you already removed, you could put your deposit at risk. Do not remove a loan contingency until your lender confirms realistic conditions and timing.
Common hiccups to watch
- Appraisal below purchase price can create a gap that needs extra cash, renegotiation, or contingency use.
- HOA documents or estoppels can arrive late or reveal assessments.
- Title issues like unpaid liens may require extra time to clear.
- Last-minute credit changes can affect final loan approval.
- Wiring errors can delay funding. Always verify instructions by phone using a trusted number.
Local notes for Cow Hollow and San Francisco
Cow Hollow’s desirability and central location often mean competitive offers, shorter contingency windows, and larger deposits. Cash or bridge-financed buyers may target 30-day closings, while financed purchases commonly run 30 to 45 days. More complex sales can take longer.
Condos are common in the area, which adds an HOA review step. Expect to review bylaws, budgets, reserve studies, meeting minutes, and any rental or use restrictions. Obtaining HOA disclosures or an estoppel letter can take days to weeks and may drive your escrow timeline.
San Francisco imposes a real property transfer tax with rate thresholds that change periodically. Who pays is negotiated in the contract. Your escrow officer will confirm current rates and how they apply to your transaction.
Wire fraud prevention is critical in the Bay Area. Confirm wiring instructions by calling your escrow officer using a verified phone number, not a link or number in an email. Consider sending a small test wire if time allows, then confirm receipt before sending the full amount.
What to prepare
Having documents ready at the start of escrow keeps you on schedule.
Buyer checklist
- Government-issued photo ID
- Proof of funds for deposit and cash to close
- Preapproval letter and lender documents such as pay stubs, tax returns, and asset statements
- HOA forms or applications if buying a condo
Seller checklist
- Government-issued photo ID
- Existing loan payoff details and property tax statements
- Required seller disclosures such as Transfer Disclosure Statement and Natural Hazard Disclosure
- HOA documents or CC&Rs and estoppel if selling a condo
- Trust or probate documents if applicable
Move smoothly with a local guide
Escrow should feel organized and predictable. You deserve a clear plan, timely updates, and confident negotiation when surprises arise. If you want one-to-few attention and a step-by-step roadmap tailored to Cow Hollow and nearby neighborhoods, connect with Nathan Jones to schedule a free consultation.
FAQs
Who picks the escrow company in California?
- Either party can propose an escrow company, and the final choice is negotiated in the contract with guidance from your agents.
When is the earnest deposit refundable in San Francisco?
- Usually when you cancel within active contingency periods set by your contract; once removed, your deposit can be at risk if you default.
How long does escrow take for Cow Hollow homes?
- Many transactions close in 30 to 60 days, with cash or bridge loans on the shorter end and financed or HOA-involved deals often taking 30 to 45 days or more.
What if the appraisal comes in low during escrow?
- You can add cash to bridge the gap, renegotiate price or terms, seek another opinion, or cancel if you kept an appraisal contingency.
What funds do I need to wire at closing?
- Your cash to close equals your down payment plus buyer closing costs minus deposits and credits; escrow provides the exact amount on your final statement.
