Top Escrow Questions

Escrow can feel like a black box -- your money goes in, weeks pass, and keys come out. Understanding what actually happens during this period removes anxiety and helps you make better decisions at each milestone. Here are the questions I hear most often from buyers.

How much earnest money do I need to deposit?

On the San Francisco Peninsula, the standard earnest money deposit is 3% of the purchase price, due within three business days of offer acceptance. On a $2.5 million home, that is $75,000. In competitive situations, a larger deposit -- 5% or even 10% -- signals strong commitment and can distinguish your offer. This money is held in a neutral escrow account and credited toward your down payment at closing. It is not an additional cost.

What happens to my deposit if the deal falls through?

If you cancel within your contingency periods (inspection, appraisal, or loan contingency), your earnest money is typically refunded in full. If you cancel after removing contingencies without a contractual basis, the seller may be entitled to retain your deposit as liquidated damages -- up to 3% of the purchase price per the standard California residential purchase agreement. This is why the timing and strategy of contingency removal matters enormously.

How long does escrow typically last?

Peninsula escrow periods range from 14 to 30 days, with 21 days being the most common for competitive offers. Cash purchases can close in as few as 7 to 10 days. The timeline depends on your financing type, the complexity of the transaction, and any special terms negotiated in the contract. I build a day-by-day timeline at the start of escrow so you know exactly what needs to happen and when.

Who chooses the escrow company?

In Santa Clara and San Mateo counties, the buyer and seller typically agree on the escrow company during negotiations. In practice, the listing agent often suggests a company, and the buyer's agent may propose an alternative. I work with several reputable local escrow companies and recommend based on the specific needs of each transaction -- speed, experience with complex financing, or multilingual support.

What are closing costs, and how much should I budget?

Buyer closing costs on the Peninsula typically range from 1.5% to 2.5% of the purchase price and include title insurance (owner's and lender's policies), escrow fees, recording fees, county transfer tax, prorated property taxes, prepaid interest, and lender fees. On a $2.5 million purchase, budget approximately $37,500 to $62,500 in closing costs beyond your down payment. I provide a detailed estimate early in escrow so there are no surprises.

Can I negotiate repairs during escrow?

If your purchase contract includes an inspection contingency, you have the right to request repairs or credits based on inspection findings. In practice, Peninsula sellers in competitive markets are less likely to agree to extensive repair requests, especially if you competed against multiple offers. The more effective approach is to request a credit toward closing costs rather than specific repairs -- this gives you control over the work and avoids disputes about quality of repairs completed by the seller.

What is a contingency removal, and when does it happen?

Contingency removal is a formal written notice that you are satisfied with a particular aspect of the transaction and are waiving your right to cancel on that basis. The standard California contract specifies default timelines -- typically 17 days for inspection and appraisal, 21 days for loan -- but competitive offers often shorten these significantly. Each removal is a point of no return for that contingency, which is why I counsel buyers carefully on timing.

What if the appraisal comes in low?

If the appraised value is below the purchase price, you have three options: negotiate a price reduction with the seller, cover the difference between appraised value and purchase price in additional cash, or cancel the transaction under your appraisal contingency (if you retained it). In Silicon Valley's fast-moving market, low appraisals are not uncommon -- especially when prices are rising quickly. I prepare buyers for this possibility before we submit offers and ensure you understand the financial implications of each option.

When do I get the keys?

Keys are released after the deed is recorded with the county recorder's office, which typically happens by early afternoon on the closing date. Your agent, the escrow officer, and the listing agent coordinate the key exchange. In some transactions, the seller retains possession for a period after closing (called a rent-back), in which case keys are transferred at the end of the rent-back period per the terms of your agreement.

No question during escrow is too small to ask. The stakes are high, the process is unfamiliar, and you deserve clarity at every step. That is what I am here for.