Escrow, Inspections & Appraisals: The Seller’s Side

What Happens After You Accept an Offer

Once you ratify a purchase agreement, escrow opens and the most detail-heavy phase of the selling process begins. A typical San Diego escrow runs 30 days, though 21-day and 45-day timelines are negotiated depending on the buyer’s financing and the specifics of the deal.

During this window, several things happen simultaneously: the buyer conducts inspections, the lender orders an appraisal, title is researched, disclosures are reviewed, and the buyer’s loan moves through underwriting. Your agent manages the timeline and coordinates between all parties. Your job is to stay responsive, keep the property accessible for inspections and the appraisal, and be prepared to negotiate if issues arise.

How Escrow Works in California

California uses escrow companies — not attorneys — to manage real estate closings. The escrow company acts as a neutral third party: they hold the buyer’s earnest money deposit, manage document flow 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. Missing a deadline can create legal exposure or give the buyer leverage you do not want to give. Stay on top of the calendar and lean on your agent to keep things on track.

As the seller, your immediate responsibilities once escrow opens include:

• Deliver disclosures promptly. California law gives sellers 7 days after acceptance to deliver the Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), and related documents. If you prepared disclosures before listing, this is already done.
• Make the property available for inspections. The buyer has a contractual right to inspect the property within the agreed contingency period (typically 17 days). Be flexible with scheduling — delays here delay the entire timeline.
• Continue maintaining the property. The home needs to be in substantially the same condition at closing as it was when the buyer made the offer. Do not stop maintaining the landscaping, do not remove fixtures included in the sale, and do not begin any unauthorized work.

Buyer’s Inspections: What to Expect

The buyer will typically order a general home inspection and may add specialized inspections depending on the property’s age and condition. As the seller, you are not present for inspections — the buyer and their agent handle this. After inspections, one of three things happens:

1. The buyer is satisfied. They remove the inspection contingency and the deal moves forward. This is the best outcome.
2. The buyer requests repairs or credits. This is the most common scenario. The buyer submits a Request for Repair (C.A.R. form) listing items they want fixed or credited. You can accept, reject, or negotiate.
3. The buyer cancels. If the inspection reveals problems the buyer is unwilling to accept, they can cancel during the contingency period and get their deposit back.

Handling Repair Requests

Not every repair request is reasonable, and you are not obligated to agree to everything. Your agent helps you evaluate each request based on:

• Safety and habitability items. Electrical hazards, gas leaks, structural issues, and active water intrusion are legitimate concerns that most sellers should address. Refusing to fix a genuine safety issue can kill the deal and create disclosure obligations for future offers.
• Maintenance and cosmetic items. Scuffed paint, minor wear and tear, and cosmetic preferences are the buyer’s responsibility, not yours. A strong agent will push back on overreaching repair demands.
• San Diego-specific issues. Termite damage (Section 1 findings), sewer lateral problems, and older-home systems (galvanized plumbing, outdated electrical panels) are common negotiation points. If you did pre-listing inspections, you have already addressed or disclosed these, which limits the buyer’s leverage.

The negotiation typically lands in one of three places: the seller makes the repairs before closing, the seller offers a credit at closing so the buyer can handle repairs themselves, or the parties agree to a price reduction. Credits are often simpler for sellers because they avoid the hassle of coordinating contractors during escrow.

The Appraisal: The Seller’s Perspective

If the buyer is financing the purchase, their lender will order an independent appraisal to confirm the property’s value supports the loan amount. The appraiser is a licensed professional who evaluates your property based on condition, features, lot size, location, and recent comparable sales.

As the seller, you want the appraisal to come in at or above the contract price. Here is what can happen:

If the appraisal meets or exceeds the contract price: The transaction moves forward with no issue.

If the appraisal comes in below the contract price: This creates an appraisal gap. The lender will only fund a loan based on the appraised value, not the contract price. Several paths forward exist:

• The buyer covers the gap with additional cash above their down payment.
• You reduce the price to the appraised value.
• You and the buyer split the difference.
• The buyer exercises their appraisal contingency and cancels the contract.

Appraisal gaps are more common in San Diego when prices are rising faster than comparable sales data can reflect. Neighborhoods where homes are selling above asking — North Park at 104.4% of list price, University City at 103.5% — are more likely to produce appraisal challenges because the appraiser is comparing your sale price to slightly older, lower-priced comps.

Having a listing agent who understands the appraisal process at a professional level is critical here. Miguel is a certified appraiser, which means he can prepare a package of comparable sales and market data for the buyer’s appraiser, supporting the contract price with the same evidence the appraiser uses. That preparation can be the difference between an appraisal that confirms your price and one that comes in short.

Title and Escrow from the Seller’s Side

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. As the seller, you need to resolve any title issues before closing:

• Existing liens. Your mortgage, any home equity line of credit (HELOC), mechanic’s liens, or tax liens must be paid off from your sale proceeds at closing.
• HOA dues. Any outstanding HOA assessments or special assessments must be cleared before title transfers.
• Judgments. Any personal judgments or IRS liens attached to you as the property owner need to be resolved.

In California, the seller customarily pays for the owner’s title insurance policy, which protects the buyer against title defects discovered after closing. This is a standard closing cost that your agent will include in your net proceeds estimate.

Contingency Removal

As each milestone clears — inspections, appraisal, loan approval, title review — the buyer removes the corresponding contingency. Each removal brings you one step closer to a guaranteed closing. If the buyer misses a contingency removal deadline, you can issue a Notice to Buyer to Perform (NBP), which gives the buyer a set number of days to either remove the contingency or cancel. This protects you from a buyer who is stalling without committing.

Once all contingencies are removed, the buyer’s deposit is at risk if they back out. At that point, the deal is as close to certain as it gets before recording.

What Comes Next

With inspections negotiated, the appraisal cleared, contingencies removed, and the buyer’s loan in final underwriting, you are headed toward closing day. The final page in this guide, Close of Escrow, covers the final walk-through, closing costs, and what to expect on the day you hand over the keys.

Looking for the previous step? Go back to Accepting an Offer.

Have questions about a repair request, an appraisal issue, or anything happening during escrow? Miguel has guided hundreds of San Diego sellers through this process. Reach out anytime: 619.253.3333 or miguel(at)junipersdre(dotted)com.