What Happens After Your Offer Is Accepted in California

What does it mean to be in escrow?

Escrow is a neutral third party holding the money and the paperwork until both sides have done what they promised.

You deposit your earnest money with them, not with the seller. They hold the deed, the loan documents, and the payoff figures, and they only release anything when the conditions are met. If the deal falls apart, escrow follows the contract and the parties' instructions to decide where the deposit goes.

Opening escrow is also what starts the clock. Almost every deadline in your contract counts from acceptance, so the calendar matters more than it did during the search.

What are the contingency deadlines in a California contract?

A contingency is a condition that lets you cancel and keep your deposit. The standard California contract has three that matter most.

Do contingencies expire automatically in California?

No, and this is the part that catches buyers who have purchased in other states.

In much of the country a contingency lapses on its own when the date passes. California's standard contract works the other way. Contingencies stay in place until you remove them in writing, on a form, signed.

That sounds like it favors you, and often it does. But it also means the deadline passing does not quietly finish anything. If you blow past the date, the seller can serve a written notice to perform. That notice gives you a short window, commonly two days, to remove the contingency or cancel. Ignore it and the seller may be able to cancel and pursue your deposit.

The practical version: put every contingency date in your calendar with a reminder several days early, and ask your agent what still has to happen before each one.

What disclosures does the seller have to give you?

California requires more written disclosure from sellers than almost anywhere else. The main ones are the Transfer Disclosure Statement, where the seller reports known defects, and the Natural Hazard Disclosure, which says whether the property sits in a flood, fire, earthquake fault, or seismic hazard zone.

You will usually also get a questionnaire covering neighborhood issues, deaths on the property, disputes, and past repairs, plus a preliminary title report, and the HOA package if there is an association.

There is a right attached to these that buyers rarely use. If the seller delivers the transfer disclosure statement after you are already in contract, the law gives you a window to back out.

What happens if the appraisal comes in low?

First, understand what it is and is not. The appraisal is the lender's opinion of value, ordered to protect the lender. It is not a verdict on whether you overpaid.

The lender lends against the lower of the price or the appraised value. So if you agreed to $1,200,000 and the appraisal lands at $1,150,000, the lender treats $1,150,000 as the number. That $50,000 difference is the appraisal gap, and someone has to cover it.

You generally have four moves: bring the difference in cash, ask the seller to reduce the price, split it, or cancel if your appraisal contingency is still in place. Which one is realistic depends entirely on how much competition the seller still has.

This is exactly why waiving the appraisal contingency in a competitive offer is a real financial decision and not a formality. If you waive it and the appraisal comes in low, the gap becomes your problem in cash.

What can still go wrong before closing?

Loan approval is the big one. Pre-approval is not final approval. Underwriting re-checks your employment, your deposits, and your debts, so do not change jobs, finance a car, or move large sums between accounts while in escrow.

Insurance is the newer problem. In parts of the Bay Area near wildland, getting a homeowner policy at a price you assumed can be slow or difficult, and no policy means no loan. Start that quote early rather than at the end.

Then the smaller ones: title issues that surface in the preliminary report, an HOA package that reveals a special assessment, a sewer lateral that fails, or a final walkthrough that finds something changed since the inspection.

Adam's takeaway

The single most useful habit after acceptance is to treat dates as decisions. Each contingency deadline is a moment where you choose to proceed with less protection, and it should be a choice you make on purpose.

The second is to read the disclosures properly rather than skimming them the night before a deadline. They are the cheapest information you will ever get about the house.

And confirm the numbers against your own contract. The defaults in this article are the common ones, but your deal is whatever you and the seller signed.