What Happens During Escrow? A Step-by-Step Guide for LA Buyers and Sellers

Once your offer is accepted, you enter escrow — a period that can feel like a black box to buyers and sellers alike. Things are happening, documents are circulating, and deadlines are passing, but it's often unclear who is doing what and when. This guide walks through the entire escrow process so you know exactly what to expect from acceptance to close.

What Is Escrow?

Escrow is a neutral third-party arrangement in which an escrow company holds funds, documents, and instructions from both buyer and seller until all conditions of the sale have been met. In California, escrow companies (not attorneys) handle most residential transactions. The escrow officer works for neither party — their job is to follow the instructions in the purchase agreement and ensure all conditions are satisfied before funds are released and title transfers.

How Long Does Escrow Take?

Standard California escrow periods are typically 21–30 days for financed purchases and as few as 7–14 days for cash. The timeline in your purchase contract governs everything — deadlines for inspections, contingency removal, loan approval, and closing are all measured from the date escrow opens. Los Angeles escrows occasionally run longer due to city-required reports, complex title situations, or lender timelines.

The Key Players

• Escrow officer: Coordinates the transaction, holds funds, prepares closing documents, and disburses proceeds at close
• Title company: Searches the property's title history for liens, encumbrances, and ownership issues; issues title insurance
• Buyer's lender: Processes the loan, orders the appraisal, issues loan documents, and funds the loan
• Both agents: Coordinate between parties, manage deadlines, and facilitate communication
• Buyer and seller: Sign documents, provide required information, and satisfy their respective obligations under the contract

Week One: Getting Everything Started

Escrow opens. The buyer's agent deposits the executed purchase agreement with the escrow company, and the buyer delivers the earnest money deposit — typically within 3 business days of acceptance. Escrow opens and the clock starts on all contractual deadlines.

Seller orders city reports. In many Los Angeles County cities, the seller is required to order a city-issued inspection report before close of escrow. These vary by city and take time to receive. See our guide to LA County presale requirements to understand what your city requires.

Buyer orders inspections. The buyer schedules their home inspection — and any additional inspections they want (pest, sewer scope, pool, chimney, etc.). In Los Angeles, this typically happens within the first 7–10 days.

Seller prepares disclosures. The seller is required to complete a Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), and any applicable local disclosures. These are delivered to the buyer, who has a right to review and cancel based on them.

Lender orders the appraisal. For financed purchases, the buyer's lender typically orders the appraisal within the first week. Appraisal turnaround in LA can take 7–14 days depending on the appraiser and property type.

Week Two: Inspections, Review, and Negotiation

Inspection results arrive. The buyer receives the inspection report and reviews findings with their agent. Based on the results, the buyer may request repairs, request a credit, accept the property as-is, or — if still within the inspection contingency window — cancel the contract.

Appraisal comes in. If the appraisal matches or exceeds the purchase price, the buyer removes the appraisal contingency and the transaction continues. If it comes in low, the parties negotiate — price reduction, buyer covering the gap, or cancellation.

Buyer reviews disclosures. The buyer has a set period to review all seller disclosures and cancel if any disclosed information is unacceptable. This review period runs concurrently with the inspection period in most transactions.

Loan processing continues. The buyer's lender is working through underwriting — verifying income, employment, assets, and the property itself. The buyer should avoid major financial changes during this time: no new credit cards, large purchases, or job changes.

Week Three: Contingency Removal and Final Steps

Contingencies are removed. As each contingency is satisfied, the buyer signs a contingency removal form. Once all contingencies are removed, the buyer's deposit is fully at risk if they cancel without a contractual basis.

Loan approval (clear to close). The lender issues a "clear to close" once underwriting is complete and all conditions are met. This triggers the preparation of final loan documents.

Final walkthrough. Within a few days of close, the buyer performs a final walkthrough of the property to verify it is in the same condition as when the offer was accepted and that any agreed repairs have been completed.

Signing. Both buyer and seller sign their respective closing documents, often at different times. Buyers typically sign loan documents at a title or escrow company or with a mobile notary.

Closing Day: Funding and Recording

Once all documents are signed, the buyer's lender wires loan funds to escrow. Escrow confirms receipt of all funds (loan proceeds plus buyer's down payment and closing costs), and then authorizes the county recorder's office to record the deed in the buyer's name. Once the deed records, the sale is complete — keys are released to the buyer, and proceeds are disbursed to the seller.

In California, recording typically happens the business day after signing, though same-day recording is sometimes possible.

What Can Go Wrong

Most escrows close without major issues, but common problems include:

• Loan delays due to underwriting conditions or appraisal issues
• Title issues — liens, unpermitted additions, or ownership disputes discovered during the title search
• Inspection findings that trigger renegotiation
• Buyer's financial situation changing during escrow (new debt, job change)
• City reports delayed or revealing compliance issues
• Seller not completing agreed repairs in time

An experienced agent anticipates these issues, monitors deadlines, and coordinates between all parties to keep the transaction on track.