Home Buyers: Opening of Escrow Timelines

Whether you are a first time home buyer, or have not purchased a home in a while, it is important to understand the timeline of events prior to the opening of escrow. Typical escrow periods are between 30 and 60 days. Due to TRID being passed in 2013, escrows are more typically in the 45 to 60 escrow timeframe. However, unless you are purchasing a property all cash, these timelines would not apply. 

Opening of Escrow: 

Once your offer is accepted, you have 3 days from the time escrow opens to deposit the earnest money deposit, which is typically 3% of the purchase price. The escrow officer will immediately send out the “Joint Escrow Instructions” which you will want to read thoroughly and sign and return to the escrow officer in a timely fashion, as time is of the essence. 

From the date of acceptance, your inspection period begins, which can be up to 17 days. This is where you will want to review the necessary disclosures from the seller, order your own home inspection, termite inspection, and others so you are able to know all the ins and outs of the property. 

Once you review all your inspection reports and you find items you want to be repaired, you will want to submit a Request for Repairs. You, as the buyer, will either request the repair or a credit and you can fix the item once you are a home owner. Once the buyer and seller agree on terms, the seller will then ask you to remove your inspection contingency, which signifies your Earnest Money Deposit going “hard”. Once your EMD is hard, you cannot back out of the deal without losing your deposit, unless the property does not appraise or you are unable to receive the loan. 

The appraisal is ordered by the buyer’s lender, which typically happens within the first 17 days of escrow. The appraiser will visit the property and create a report of the subject property under contract and the nearest comparable properties. 

Following the appraisal, assuming the subject property appraises at the purchase price, comes loan approval from the lender. Once unconditional loan approval is received, which is in the 21-25 day mark, the buyer removes their loan contingency. If the escrow period is longer, we recommend making your loan contingency time period longer. 

As the buyer, this is the process of the first 25 days of escrow. There are obviously a multitude of documents and disclosures to sign, but this is a general run down to get an idea of the process. Our next post will go into the closing of escrow process. Please contact us if you have any further questions in regards to buying property.