Offers, escrow, and closing when you sell in Monterey County

Last checked: October 2026. This chapter describes how things usually work with the standard California purchase contract. Your actual contract terms are what count, so read them with your agent.

Once your home is on the market, the next big step is the offer. From there, escrow takes over, and there's a set of deadlines both you and the buyer have to meet before the sale closes.

This chapter walks through that process from the seller's side: what to look for in an offer, what the buyer can and can't do once you're in contract, and what you'll need to do along the way. For the buyer's side of the same process, see Chapter 8 of the Buyer's Guide.

What's in an offer

An offer is more than a price. When one comes in, these are the main pieces we'll look at together:

• Price. What the buyer is offering to pay.
• Financing. Whether the buyer is paying cash or getting a loan, what kind of loan, and how much they're putting down.
• Deposit. Around here, about 3% of the price is normal. It goes to escrow, usually within 3 business days after you accept.
• Contingencies. The conditions that let the buyer cancel and get their deposit back, like inspections, the appraisal, the loan, and insurance. More on these below.
• Closing date. How long until the sale closes.
• Who pays for what. Escrow and title fees, the transfer tax, reports, and local requirements like the city inspection reports and water fixture upgrades from Chapter 5.
• Credits and compensation. Whether the buyer is asking you to cover some of their closing costs or their agent's compensation, as covered in Chapter 6.
• A pre-approval letter or proof of funds. This shows the buyer can actually close.

I go through every offer with my sellers in detail. I also call the buyer's agent and the buyer's lender myself to get a better sense of how solid the offer is. All communication with the buyer's side goes through me, so you never have to deal with them directly.

Comparing offers

The highest price isn't always the best offer. An offer you can count on closing is often worth more than a slightly higher one that might fall apart.

A few things that make an offer stronger, even at the same price:

• A larger down payment. Less risk if the appraisal comes in low.
• Cash, or a strong loan. A buyer with a solid pre-approval from a responsive lender is less likely to run into trouble.
• Shorter contingency periods. You know sooner whether the buyer is committed.
• A closing date that works for you.
• Fewer credits or requests.

It helps to keep expectations realistic, though. Shorter contingencies and offers with no requests usually come from competition. If several buyers want your home, they'll often do more to stand out. If you're the only offer, especially on a home priced on the high side, most buyers will write with the standard terms.

The same goes for credits. A buyer may ask for one because the home needs work, or because they need help with closing costs or a lower interest rate to afford the home. Some requests make sense, and some don't. My job is to get you the best terms and the most money, and that usually means negotiating each request based on how much the buyer actually needs it, not accepting or rejecting it automatically.

What matters in the end is what you walk away with. A higher offer that asks for more can leave you with the same or less than a lower offer that asks for nothing. I can run a net sheet on each offer so you can compare them side by side.

Liquidated damages

The contract has an optional section called liquidated damages. If both you and the buyer initial it, and the buyer later backs out without a valid reason under the contract, you can generally keep the buyer's deposit. When the buyer plans to live in the home, California law generally caps what you can keep at 3% of the purchase price.

It gives both sides a pre-agreed amount if the buyer breaches, which can help avoid a bigger dispute later. I'm not a lawyer, so I can't tell you whether to initial it. What I can tell you is that in my experience, on both the listing side and the buyer side, I haven't had a seller who didn't. Your agent can walk you through it, or you can talk to a real estate attorney.

The mediation and arbitration sections are more situational. They affect how disputes are handled, and sometimes both sides want them, sometimes neither does. Read them and ask questions, and talk to a real estate attorney about what's best for you.

Countering

You don't have to accept an offer as written. You can accept it, reject it, or make a counter offer that changes some of the terms, like the price, the closing date, or the deposit.

When there's more than one offer, you can counter more than one buyer at the same time with a multiple counter offer. That form has an extra step built in: even if a buyer signs your counter, it isn't binding until you sign it again to accept. That way you don't end up in contract with two buyers at once.

Countering is a negotiation, so there's always some risk a buyer walks away. We'll talk through what you want to get and what you're willing to give before we respond.

You can also accept a backup offer, so if your first buyer cancels, the next one is already lined up.

The buyer's deadlines

Once you accept, the clock starts. The standard contract's default deadlines, counted from acceptance, look like this:

• 3 business days: The buyer's deposit is due to escrow.
• 7 days: Your disclosures are due to the buyer. If you filled them out before listing, this part is already done.
• 17 days: The buyer's four main contingencies end: investigation (inspections), appraisal, loan, and insurance.
• Closing: Whatever date the contract says, often around 30 days.

These are defaults, and they can be changed in the offer or a counter.

How contingencies work from your side

During the contingency period, the buyer can generally cancel and get their deposit back if something doesn't work out, like an inspection result, the appraisal, their loan, or insurance.

Contingencies don't expire on their own in California. The buyer removes them in writing. If a deadline passes and the buyer hasn't removed a contingency, you can't just cancel right away. You can send a Notice to Buyer to Perform, which gives the buyer 2 days to remove it or cancel. If they don't, you can then cancel the contract in writing.

That cancellation isn't automatic. Until your written cancellation is actually delivered to the buyer, the buyer can still remove the contingency and keep the deal going. And even after you cancel, escrow still needs signed instructions to close out the file and release the deposit, as covered below. Your agent will handle the paperwork, but it's good to know it isn't instant.

Once the buyer removes all of their contingencies, they're committed. If they back out after that without a valid reason, the deposit may be at stake.

If the buyer cancels

If the buyer cancels properly during their contingency period, their deposit generally goes back to them. Escrow usually needs both the buyer and the seller to sign cancellation instructions before it releases the deposit. Refusing to sign without a good-faith reason can expose you to penalties under California law, so talk to your agent before you hold a deposit up.

The buyer also doesn't have to tell you why they're canceling. Their agent may only say they're canceling under their inspection contingency, or whichever contingency applies. I'll always try to find out, because it helps to know before the next buyer comes along, but the buyer can cancel and get their deposit back without giving a reason. California's contract gives buyers a lot of protection during the contingency period.

If your home goes back on the market, the listing will show it was in escrow. That's common, and it doesn't have to hurt you.

Your part during escrow

Most of escrow is guided by your agent and the escrow officer, but there are a few things you'll need to do:

• Fill out your paperwork. Escrow will send you instructions and a Statement of Information, which helps the title company confirm your identity and clear up any title issues. Return them quickly.
• Finish your disclosures, if you haven't already. See Chapter 5.
• Order local reports. City inspection reports, sewer lateral inspections, and water fixture inspections can take a few weeks. If you didn't start them when you listed, start right away.
• Give access. The buyer will schedule inspections, and the appraiser will need to get in. It's usually best not to be home during inspections. If you need to be, give the inspectors room to work and save your questions for your agent. For the appraisal, it's even more important to be out. The appraiser needs to form their own opinion, and sellers can't try to influence it.
• Keep the home in the same condition. Keep up the yard, the systems, and everything else, and don't remove anything that's included in the sale.
• Keep your homeowners insurance in place until the sale closes.

Repair requests

After inspections, the buyer may ask you to fix something, give a credit, or lower the price. You can say yes, say no, or counter.

How you respond depends on what was found, how strong the market is, and how much you want to keep this buyer. A reasonable request on a real issue is often worth working out, because the next buyer will likely find the same thing. Credits are often simpler than repairs, especially if you're out of the area or don't want to manage the work.

If you do agree to repairs, use licensed contractors where required, and keep the invoices and receipts. Repairs are supposed to be finished at least 5 days before closing, and the buyer will check them at the final walk-through.

Remember that the buyer doesn't have to accept your answer. If you say no, they can decide whether to move forward or cancel, as long as their contingencies are still in place. See Chapter 8 for more on how "as-is" works with the standard contract.

The appraisal

If the buyer is getting a loan, the lender will order an appraisal. If it comes in at or above the price, nothing changes.

If it comes in lower, and the buyer still has their appraisal contingency, they generally have three options: ask you to lower the price, pay the difference in cash, or cancel. You can agree, say no, or meet in the middle. This is one more reason pricing based on the sales matters, as covered in Chapter 3.

The week of closing

Signing your documents

A few days before closing, you'll sign your seller documents, including the grant deed, with a notary. This is usually at the title company's office. If you're out of the area, escrow can usually arrange a mobile notary where you are.

The final walk-through

Shortly before closing, the buyer does a final walk-through to confirm the home is in the same condition as when you accepted their offer, that agreed repairs were done, and that your belongings are gone. It gets documented on a form called the Verification of Property Condition.

Pay close attention to what's included in the sale. Built-in appliances, light fixtures, window coverings, and anything attached to the house are generally included unless the contract says otherwise. If there's something you plan to take with you, like a chandelier or a piece of stained glass, make sure it's clearly excluded in the contract, or replace it before you list. I've seen a seller remove a stained glass piece from a front door that the buyer thought was included, and it turned into a real problem right before closing.

Moving out

Unless you've agreed otherwise, the buyer has the right to move in as soon as the sale records, so you should already be moved out by then. Many sellers start booking movers once the buyer has removed their contingencies and the sale is more certain. Leave the home clean and empty, except for anything included in the sale. Leave behind keys, garage door openers, and any manuals or warranties for appliances and systems that stay with the house.

If you need to stay a little longer

If you need more time after closing, usually because you're buying your next home, you can ask the buyer for a rent-back. It's set up with a separate written agreement:

• Under 30 days uses a short agreement called the Seller in Possession addendum.
• 30 days or more uses a full residential lease. That's a bigger commitment for the buyer, so expect more pushback.

While you're in the home after closing, the buyer owns it, so talk to your insurance agent about coverage for your belongings. Sometimes a longer escrow works better than a rent-back, if the buyer is open to it. Chapter 9 covers this in more detail.

Closing day

In California, the sale officially closes when the deed is recorded with the county. Escrow then pays off your loan and other costs and sends you your proceeds, usually by wire.

One warning: wire fraud targets sellers too. Scammers send fake emails asking you to change where your proceeds are sent. Give escrow your wiring information directly, and if you get any message asking to change it, call your escrow officer at a phone number you already know is real.

After closing, cancel your homeowners insurance and transfer or shut off your utilities. Keep your final settlement statement with your tax records, since your CPA will need it.

Where to focus your own research

• Every offer: Look at the whole offer, not just the price, and ask for a net sheet on each one.
• Your deadlines: I give my sellers an escrow timeline with every date on it. Know when the buyer's contingencies end.
• What's included: Make sure anything you're taking with you is clearly excluded before you list or accept an offer.
• Your local reports: Start them early so they don't hold up closing.

If you have an offer in hand or you're getting ready to list, reach out. I'm happy to walk through it with you.

---

This is general information, not legal advice. Your purchase contract controls your rights and deadlines, and terms vary from deal to deal. Ask your agent to explain anything you're unsure about, and talk to a real estate attorney for legal questions. I'm a real estate agent, not a lawyer.