Chapter 11: Navigating Escrow Like a Pro — From Contingencies to Closing

With the deposit sent and escrow open, it’s time to guide your clients through the heart of the transaction. Managing the transaction with or without contingencies, securing insurance, handling deposits and preparing for closing are where skilled agents shine. Here’s how to make sure every deal crosses the finish line smoothly. 

1. Manage Your Contingencies

Inspections:
Review seller-provided reports and explain which issues require immediate attention versus what can wait. If you have an inspection contingency, schedule inspections early to leave time for review.

If you have a contingency for inspections and one hasn’t been provided to you in the disclosure package, you can negotiate a credit if serious or undisclosed issues arise. Asking for a laundry list of small fixes damages credibility. Only pursue credits for major, unexpected issues.

Loan & Appraisal:
Stay in close touch with the lender. Make sure the appraisal is ordered quickly and track its progress. Ideally, you or the listing agent should meet the appraiser with comparables in hand.

If an appraisal or (loan) any contingency is delayed, always request a formal extension before time runs out — sellers can legally move to another offer once deadlines are missed.

2. Talk About Insurance Early

Insurance has become a major obstacle in many states, especially California. Before making an offer, confirm that your buyers can secure coverage and at what cost. Older homes, especially pre-1920s properties, can be challenging to insure.

Remind clients:

• The newer and better maintained the home, the easier it is to insure.

• Insurance companies may inspect post-closing, so visible old wiring (like knob-and-tube) should be replaced soon after purchase. 

• The California FAIR Plan exists as a last resort but is significantly more expensive.

Help your clients connect with trusted insurance agents early to avoid last-minute surprises.

3. Understand Closing Costs

Buyers will ask about this early and often. Here’s a quick breakdown:

Non-Recurring Costs (one-time fees):

• Title insurance

• Lender’s title insurance

• Escrow fees

• Loan fees or points (if applicable)

Recurring Costs:

• One year of insurance premiums (paid upfront)

• Property tax prorations (seller pays through closing day, buyer after)

• Mortgage interest prorations

Encourage clients to contact the escrow officer for the most accurate estimate — they’re happy to explain everything.

4. Preparing for Closing

Once loan approval and appraisal are complete, the final steps move quickly.

• Confirm key handoff and appliance warranties with the listing agent.

• Schedule a final walkthrough 2–3 days before closing to check for items left behind.

• Ensure old paint and debris are removed.

• Remind buyers to wire their final down payment 2–3 days before closing to avoid delays.

The escrow officer will schedule document signing, either in-office or via a mobile notary. Once everything’s signed, the escrow and title companies handle the rest — and when you get that email that says “we’re closed,” it’s time to deposit your check!