Escrow inspections & appraisals

What Happens After Your Offer Is Accepted

Once a seller accepts your offer in San Diego, the transaction moves into escrow. This is the most detail-heavy phase of buying a home, and it is where deals either come together or fall apart. A typical San Diego escrow runs 30 days, though 21-day and 45-day timelines are common depending on the situation. During that window, several things happen simultaneously: inspections, the appraisal, loan underwriting, title review, and insurance procurement.

Your real estate agent manages this timeline and coordinates between all parties. Your job is to stay responsive, review documents promptly, and avoid making any major financial changes (no new credit cards, no large purchases, no job changes) until the keys are in your hand.

Opening Escrow in California

California uses escrow companies (not attorneys, as on the East Coast) to handle the closing process. The escrow company acts as a neutral third party: they hold your earnest money deposit, manage the flow of documents between buyer, seller, lenders, and title companies, and ensure all conditions of the purchase agreement are met before funds and title change hands.

When escrow opens, you will receive a timeline of key dates and deadlines. These are contractual, not suggestions. Missing a contingency deadline can cost you your deposit or your right to negotiate. Keep a calendar, and lean on your agent to keep everything on track.

A few things to do immediately after escrow opens:

• Wire your earnest money deposit. Typically due within 3 business days of acceptance. Always verify wiring instructions directly with your escrow officer by phone. Wire fraud is real and increasingly common.
• Contact your lender. Your loan officer needs to know escrow is open so they can order the appraisal and begin final underwriting. If you were pre-approved, this process moves faster because much of the paperwork is already done.
• Schedule inspections. You typically have 17 days for the inspection contingency period in California (per the standard C.A.R. purchase agreement), though this can be negotiated shorter in competitive situations.

If you are using a VA loan, your escrow process includes additional protections: the VA caps what veterans can be charged in closing costs, and sellers can contribute up to 4% of the purchase price toward your transaction costs. These rules can meaningfully reduce your cash-to-close in a high-cost market like San Diego.

Home Inspections: What San Diego Buyers Need to Watch For

A licensed general inspector will evaluate the property’s major systems: roof, foundation, electrical, plumbing, HVAC, and overall structure. The inspection usually takes 2 to 4 hours, and you should be there for it. Walking the property with your inspector is the best education you will get about what you are buying.

Beyond the general inspection, San Diego properties have specific issues that justify specialized inspections:

Sewer Lateral Inspections

San Diego’s aging sewer infrastructure means many older homes have original clay or cast-iron sewer laterals (the pipe connecting the house to the city main). Tree root intrusion, bellying, and cracks are common. A sewer scope (camera inspection) costs $150 to $300 and can save you from a $10,000+ replacement surprise after closing. In parts of the city, the municipality requires sewer lateral compliance at point of sale.

Termite and Pest Inspections

San Diego’s warm, dry climate is ideal for drywood termites, and infestations are extremely common in older homes. A Section 1 termite report identifies active infestations and damage; Section 2 covers conditions likely to lead to infestation. Most lenders require a clear Section 1 report before funding. If the report flags issues, the cost of remediation becomes a negotiation point between buyer and seller.

Older Home Systems (Pre-1980 Construction)

A large share of San Diego’s housing stock was built between the 1950s and 1970s. These homes often have character and larger lots, but they can also come with:

• Galvanized steel plumbing that corrodes from the inside, reducing water pressure and eventually requiring full repiping ($5,000 to $15,000 depending on size).
• Outdated electrical panels (Federal Pacific, Zinsco) that may not meet current safety standards and can be difficult or expensive to insure.
• Flat or low-slope roofs common in mid-century San Diego homes. These require more frequent maintenance than pitched roofs and are prone to ponding and leaks if not properly maintained.
• Single-pane windows that drive up cooling costs. Replacement is a common home improvement that adds value in the San Diego market.

None of these are deal-breakers, but they need to be identified and priced into your offer or your repair budget. A good inspector will flag them; a good agent will help you figure out what to negotiate and what to accept.

Condo and HOA-Specific Reviews

If you are buying a condo or townhome, the inspection extends beyond the unit itself. Request and review:

• The HOA reserve study. This shows how much money the association has set aside for major repairs (roof, elevator, pool, parking structure). Underfunded reserves mean special assessments are coming.
• Recent HOA meeting minutes. These reveal ongoing disputes, pending litigation, deferred maintenance, and planned rule changes.
• CC&Rs (Covenants, Conditions & Restrictions). These govern what you can and cannot do with your unit, from rental restrictions to pet policies to renovation approvals. Read them before you commit, not after.

The Appraisal: What It Is and Why It Matters

If you are financing your purchase, your lender will order an appraisal to confirm the property’s value supports the loan amount. The appraiser is a licensed professional (independent from both buyer and seller) who evaluates the property based on its condition, features, lot size, location, and recent comparable sales in the area.

In San Diego’s market, appraisals matter more than usual because prices have been climbing steadily. When values rise faster than comparable sales data can keep up, appraisals sometimes come in below the agreed purchase price. That creates an appraisal gap.

If the appraisal comes in at or above the purchase price: No issue. The transaction moves forward.

If the appraisal comes in below the purchase price: You have options. You can renegotiate the price with the seller, make up the difference in cash (above your down payment), ask the seller to split the gap, or in some cases walk away using your appraisal contingency. Your agent will advise on the best path based on the specifics.

Working with an agent who understands property valuation at a professional level gives you an advantage here. Miguel is a certified appraiser, which means he can evaluate whether a listing price is supported by the data before you make an offer, and help you navigate an appraisal gap if one arises. That is a level of expertise most buyer’s agents cannot offer.

Title Review and Insurance

The title company researches the property’s complete ownership history to confirm the title is free and clear of liens, encumbrances, unpaid taxes, and ownership disputes. You will receive a preliminary title report during escrow. Review it carefully with your agent.

Title insurance protects you against defects in the title that were not discovered during the search. In California, the seller typically pays for the owner’s title policy, while the buyer pays for the lender’s title policy (required by your mortgage lender).

A few San Diego-specific title items to watch for:

• Mello-Roos Community Facilities Districts. Common in newer developments in East County, Chula Vista, and parts of Carmel Valley. These are special tax assessments that fund local infrastructure (schools, roads, parks) and add $2,000 to $8,000+ per year to your property tax bill. They show up on the preliminary title report. Make sure you understand the annual cost before committing.
• Easements and encroachments. Older San Diego neighborhoods sometimes have shared driveways, utility easements, or boundary discrepancies that affect what you can build or where you can park.
• HOA liens. If the seller is behind on HOA dues, the outstanding balance must be cleared before title can transfer.

Property Insurance in San Diego

Your lender will require homeowner’s insurance before funding the loan. In San Diego, a few factors can affect your coverage options and cost:

• Wildfire zones. Properties in eastern San Diego County, hillside areas, and brush-adjacent lots may fall within a state-designated fire severity zone. Insurance availability and pricing vary significantly. Some carriers will not write policies in high-fire zones, so shop early and get quotes before your contingency periods expire.
• Flood zones. Parts of Mission Valley and low-lying coastal areas sit within FEMA-designated flood zones. If your property is in a flood zone, your lender will require separate flood insurance, which adds to your monthly costs.
• Earthquake insurance. Standard homeowner’s policies in California do not cover earthquake damage. Earthquake insurance is optional but worth evaluating, especially for older homes on hillsides or near known fault lines. The California Earthquake Authority (CEA) offers policies through most major carriers.

Start shopping for insurance as soon as escrow opens. Getting quotes early gives you time to budget accurately and avoids last-minute scrambles that can delay closing.

How to Hold Title

Before closing, you will need to decide how to hold title to the property. This decision has legal, tax, and estate planning implications. Common options in California include:

• Sole ownership for individual buyers.
• Community property or community property with right of survivorship for married couples (California is a community property state).
• Joint tenancy for unmarried co-buyers who want equal ownership with right of survivorship.
• Tenants in common for co-buyers who want unequal ownership shares or different beneficiary arrangements.
• A living trust for estate planning purposes.

Consult a real estate attorney or tax advisor before making this decision. How you hold title affects property taxes, inheritance, liability, and what happens if one owner passes away. Your agent can recommend professionals who handle this regularly.

What Comes Next

If inspections, the appraisal, and loan underwriting all clear, you are headed to closing day. The final step in this guide, Moving In, covers your final walk-through, the closing appointment, and what to do once the keys are yours.

Have questions about what to expect during escrow? Miguel has guided hundreds of San Diego buyers through this process and can walk you through every step. Reach out anytime: 619.253.3333 or miguel(at)junipersdre(dotted)com.