Closing Escrow

Escrow is the structured process that protects both buyer and seller as the transaction moves toward completion. On the San Francisco Peninsula, escrow periods typically run 21 to 30 days -- a compressed timeline that demands precision from everyone involved. Here is what to expect at each stage.

Step 1: Open escrow and deposit earnest money

Within three business days of your offer being accepted, you will wire your earnest money deposit -- typically 3% of the purchase price -- into the escrow account. This deposit demonstrates your commitment and is held by a neutral escrow officer until closing. On a $2.5 million Peninsula purchase, expect to deposit $75,000. These funds are credited toward your down payment at closing.

Step 2: Schedule inspections

Even if the seller has already provided inspection reports in the disclosure package, I strongly recommend conducting your own independent inspections. A general home inspection covers the structure, electrical, plumbing, HVAC, and roof. Depending on the property, you may also want a pest inspection, sewer lateral scope, chimney inspection, or geological assessment -- particularly for hillside properties in Woodside, Portola Valley, or the Los Altos hills.

Inspections typically occur within the first seven to ten days of escrow. I attend every inspection with you and take detailed notes. If issues arise, we discuss whether to negotiate repairs, request credits, or accept the condition as-is.

Step 3: Secure financing

Your lender will order an appraisal and begin processing your loan. The appraiser visits the property to determine its market value -- this protects the lender (and you) from overpaying. If the appraisal comes in below the purchase price, we have options: renegotiate the price, make up the difference in cash, or, if you have an appraisal contingency, withdraw. I work closely with your loan officer to monitor progress and address any conditions the underwriter flags.

Step 4: Obtain homeowner's insurance

Your lender will require proof of homeowner's insurance before funding the loan. In certain Peninsula areas -- particularly those near wildfire zones or in older structures -- securing adequate coverage requires advance planning. Begin the insurance process early in escrow to avoid last-minute complications. I can recommend insurance brokers who specialize in high-value Silicon Valley properties.

Step 5: Transfer utilities

Before closing, arrange to transfer PG&E, water, garbage, and any other utilities into your name effective on the closing date. For properties in Palo Alto, note that the city operates its own utility service (City of Palo Alto Utilities) separate from PG&E. I provide a complete utility checklist specific to your city.

Step 6: Review closing costs

Your escrow officer will prepare a settlement statement detailing all costs. Buyer closing costs on the Peninsula typically include:

• Loan origination fees (varies by lender)
• Title insurance -- owner's and lender's policies
• Escrow fees (split with the seller in most Peninsula transactions)
• Recording fees and transfer taxes
• Prorated property taxes and HOA dues
• Prepaid interest from closing to end of month

Budget approximately 1.5% to 2.5% of the purchase price for total buyer closing costs, in addition to your down payment.

Step 7: Final walk-through

Within five days of closing -- often the day before or the morning of -- we conduct a final walk-through of the property. This is not a second inspection. It is a verification that the property is in the agreed-upon condition, that the seller has completed any negotiated repairs, and that nothing has changed since your initial inspections. I bring a detailed checklist covering all systems, fixtures, and areas of concern.

Step 8: Fund transfer and recording

On closing day, your lender wires the loan funds to escrow, and you wire your remaining down payment and closing costs. The escrow officer disburses funds to the seller, and the deed is recorded with the county recorder's office. Once recording is confirmed -- typically by early afternoon -- the property is legally yours.

The difference between a smooth close and a stressful one is proactive management of every deadline. I track every milestone so you never have to wonder what comes next.

Contingency removal

Throughout escrow, you will remove contingencies as each condition is satisfied -- inspection, appraisal, and loan. Each removal is a formal acknowledgment that you are satisfied with that aspect of the transaction and are committed to proceeding. The timing of contingency removal is strategic, and I advise you on when and how to proceed at each stage based on the specific circumstances of your transaction.