Buying or selling a home in San Jose and feeling unsure about escrow? You are not alone. Escrow is where the money, documents, and final details all come together, which can feel complex the first time you experience it. In this guide, you will learn how escrow works locally, what to expect at each step, which disclosures matter in Santa Clara County, and how to avoid delays and wire fraud. Let’s dive in.
What escrow means in San Jose
Escrow is a neutral third party that holds funds and documents until everyone meets the terms of the purchase contract. In our area, a title company often also serves as the escrow holder. This protects you by making sure money and ownership transfer only when the contract and lender requirements are satisfied.
Common parties include you and the other principal, your real estate agents, the escrow officer, the title officer, and your lender if you are financing. Other pros may be involved, like inspectors or HOA managers. The goal is a clear, safe path to recording and closing.
The escrow timeline step by step
Open escrow
Escrow opens after the seller accepts an offer. You deliver your earnest money deposit to escrow by wire or check. The escrow holder assigns a file number and shares contact details so everyone can communicate and upload documents.
Share disclosures and documents
Sellers provide required disclosures. Buyers start inspections, submit loan paperwork if financing, and select insurance. Escrow requests IDs, payoff statements, and HOA documents if the property is in an association.
Title search and prelim
The title company reviews public records and issues a Preliminary Title Report. This report lists items like liens or easements. You review and either resolve items before closing or accept them per contract terms.
Inspections and contingencies
You typically order home and pest inspections during your contingency period. If issues come up, you may request repairs or a credit. Any agreements are documented through escrow and, if needed, an escrow holdback is set until work is done.
Loan and disclosure timing
If you have a mortgage, your lender underwrites your file and issues a Closing Disclosure. Federal rules require you to receive the Closing Disclosure at least three business days before you sign your loan. Keep an eye on appraisal, income verification, and title requirements so you meet deadlines.
Walkthrough and contingency removal
Close to the finish line, you complete a final walkthrough to confirm the property condition. You then remove contingencies per the contract to allow closing to proceed.
Signing, funding, recording
Escrow schedules your signing. You sign escrow instructions, loan documents if applicable, and the deed. You wire closing funds, the lender wires loan proceeds, and escrow confirms everything is received. Escrow then records the deed and any mortgage with the Santa Clara County Recorder.
Closing and keys
Once recording is confirmed, escrow disburses funds, pays off liens, and releases final statements. Your agent arranges key delivery based on the contract.
Local rules and disclosures
Required seller disclosures
California sellers provide a Transfer Disclosure Statement and a Natural Hazard Disclosure that identifies mapped hazard areas such as earthquake fault zones or flood zones. Other common disclosures include lead-based paint for homes built before 1978, a Megan’s Law notice, and a seller property questionnaire. For condos or HOA homes, you receive governing documents, budgets, and reserve studies. Buyers often have specific review or cancellation rights that depend on state law and the contract.
Taxes and assessments to expect
A change in ownership can trigger supplemental property tax bills after closing. Some neighborhoods include Mello-Roos or other special assessments. These items appear in the title report or local records and must be disclosed. Transfer taxes vary by city and county. Confirm current practices and who pays with the Santa Clara County offices or the City of San Jose.
Permits and unpermitted work
San Jose tracks building permits. If the home has additions or major updates, confirm permits were pulled and finalized. Unpermitted work can impact loans, insurance, and resale.
Local customs on timing and fees
Typical financed escrows in the Bay Area run about 30 to 45 days. Cash deals can be faster if both sides agree. Who pays owner’s title insurance or how escrow fees are split can vary. The purchase contract controls, so review it and ask for an early closing estimate from escrow.
Closing costs overview
Escrow handles most closing costs and prorations. Here are common items you may see:
- Escrow fee for the escrow company’s services
- Title insurance premiums for owner and lender policies
- County recording fees for the deed and mortgage
- Lender charges like origination, underwriting, points, and appraisal
- Property tax prorations, prepaid interest, and HOA dues prorations
- Seller loan payoffs, release fees, and broker commissions
- Transfer taxes, if applicable, plus any special assessments
- Wire and handling fees for payoffs
Who pays what is negotiated in your contract. If you are financing, compare your lender’s Closing Disclosure with escrow’s settlement statement and ask questions early if numbers differ.
Avoid delays and wire fraud
Common issues that slow closings
Title defects, appraisal delays, inspection repairs, and HOA document holdups are frequent causes. Missing payoffs or unpermitted work can also surface late. Clear, prompt communication with your agent, lender, and escrow officer helps keep things on track.
Wire safety tips
- Call your escrow officer using a trusted phone number to confirm wiring instructions before sending funds.
- Do not rely on emailed wire instructions alone. Verify changes by phone.
- Ask your bank about verification steps and set transfer limits or alerts.
- Send a small test wire if timing allows, then confirm receipt before sending the balance.
Buyer and seller checklists
Buyer checklist
- Provide government-issued ID and proof of closing funds.
- Complete your loan application and answer lender conditions quickly.
- Order inspections as soon as escrow opens.
- Review the Preliminary Title Report and any HOA package.
- Confirm homeowner’s insurance is effective on the closing date.
- Verify wiring instructions with escrow by phone before you send funds.
- Review both the Closing Disclosure and the escrow settlement statement.
Seller checklist
- Deliver required disclosures, including TDS and NHD.
- Share any permits and HOA documents you have on hand.
- Order payoff statements for any loans or liens.
- Provide easy access for inspections and the appraisal.
- Review your settlement statement and confirm disbursement instructions.
How an expert helps your escrow
A strong advocate streamlines your path to closing. With a background as a real estate attorney and deep relocation experience in the South Bay and Peninsula, Michal helps you understand timelines, negotiate repairs or credits, verify wire procedures, and navigate local disclosures. You get calm guidance and practical next steps at every milestone.
If you want a smooth, low-stress close in San Jose, connect with Michal Amodai for clear, hands-on support from offer to recording.
FAQs
Escrow timeline in San Jose: How long does it take?
- Most financed escrows close in about 30 to 45 days, while uncomplicated cash deals can finish in one to two weeks depending on title, inspections, and responsiveness.
Earnest money: Where does it go and can I get it back?
- Your deposit is held in escrow and applied at closing, and whether it is refundable depends on your contract contingencies and deadlines.
Fees and policies: Who pays escrow and title costs?
- It is negotiated in the purchase contract, and in many California markets sellers often pay the owner’s title policy while the escrow fee may be split, but local practice varies.
Title report issues: What if liens or easements appear?
- Title items must be cleared or accepted before closing, and title insurance can protect against certain hidden risks when you purchase a policy.
Repairs after inspections: Can escrow hold funds?
- Yes, escrow can document agreements for repair credits or holdbacks and release funds once specified work is completed.
Property taxes at closing: How are they prorated?
- Taxes are prorated through the closing date, and you may receive separate supplemental tax bills after you take ownership in California.
Wire fraud prevention: How do I keep my funds safe?
- Confirm wire instructions by phone with your escrow officer using a known number, and never rely on emailed changes without live verification.
