What Happens After Your Offer Is Accepted?
Congratulations! Your offer has been accepted, and you’re officially “in escrow.”
For many buyers, this is where the real work begins. Understanding what escrow is and what happens next can help make the process far less stressful.
What Is Escrow?
Escrow is a neutral process designed to protect both the buyer and seller while the transaction is completed.
Think of the escrow company as a trusted third party. They hold important documents and funds until all of the conditions of the purchase agreement have been satisfied. Once everything is completed, escrow transfers ownership of the property to the buyer and the purchase proceeds to the seller.
In simple terms, escrow is the period between an accepted offer and closing.
Step 1: Deposit Your Earnest Money Deposit (EMD)
One of the first things you’ll do after opening escrow is deposit your Earnest Money Deposit (EMD).
The EMD is required by the Purchase Agreement (typically within one business day), and is required to form a binding agreement. The funds are deposited with the escrow company and held in a trust account until closing.
The amount varies, but it is almost always 3% of the purchase price.
If the transaction closes, the EMD is credited toward your down payment and closing costs.
Step 2: Finalize Your Loan
Your lender will continue processing your loan.
This may include:
- Obtaining the Purchase Contract (we do that for you)
- Updated financial documents
- Employment verification
- Appraisal
- Underwriting review
- Closing
If you obtained a fully underwritten approval before making your offer, this process is often much smoother because much of the lender’s review has already been completed.
Removing a contingency generally means you are satisfied with that portion of the transaction and are prepared to move forward.
Step 3: Sign Your Loan and Escrow Documents
A few days before closing, escrow will prepare the final documents.
You’ll typically sign:
- Loan documents
- Closing disclosures
- Escrow instructions
- Transfer documents
At this stage, you’ll also receive the final amount needed to close.
Step 4: Wire Your Remaining Funds
Prior to closing, you’ll transfer the balance of your down payment and closing costs to escrow. This can either be done by a Cashier’s Check or Wire.
Always verify wire instructions directly with the escrow officer before sending funds, as wire fraud has become increasingly common.
Step 5: Final Verification and Funding
Once all documents have been signed and funds received, the lender wires the loan proceeds to escrow.
Escrow confirms that all conditions have been satisfied and authorizes the transaction to close.
Step 6: Utilities
Be sure to arrange for the utility companies to begin service in your name. A disconnect-and-reconnect fee may be charged by PG&E and the water company if there is any lapse in service.
Step 7: Recordation and Closing
The county records the deed transferring ownership from the seller to the buyer.
Once recording occurs, the transaction is officially closed.
Congratulations—you are now a homeowner!
Step 8: Receive Your Keys
After confirmation of recording, you’ll receive the keys, garage door openers, security codes, and any other items associated with the property.
Now the fun begins.
The Bottom Line
Escrow is designed to protect both the buyer and seller while all aspects of the transaction are completed. Although every transaction is different, most escrows follow the same general path:
- Deposit EMD
- Finalize Financing
- Sign Documents
- Deposit Funds
- Change Utilkities
- Close Escrow
- Receive Keys
While the process can seem complicated, having experienced professionals guiding you along the way can help ensure a smooth and successful closing.
We’re always here to help or answer any questions you may have.
Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA, where they own and operate MORGANHOMES, Inc. They have assisted buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award, ranking among the top 50 agents nationwide and the top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or emailinfo@morganhomes.com.
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This article provides educational information and is intended for informational purposes only. It should not be considered real estate, tax, insurance, or legal advice; it cannot replace advice tailored to your situation. It’s always best to seek guidance from a professional familiar with your scenario.
BROKER | MANAGER | NOTARY
