Making an offer and closing on a home in Monterey County

Last checked: September 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.

Most of what happens between "I want this house" and getting the keys is set by California's standard purchase contract, which is used in the vast majority of home sales here. This chapter walks through that process and points out where Monterey County adds its own steps.

Before you write an offer

A few things make an offer stronger and your life easier once you're in contract:

• A buyer representation agreement with your agent. Expect to sign one before an agent shows you any homes, including by video. It spells out your agent's compensation. More on this in Chapter 3.
• A pre-approval letter or proof of funds. Sellers want to know you can close. These are usually attached to the offer.
• A rough read on insurance. As covered in Chapter 7, insurance can be harder to get or more expensive for some homes. It's better to know that early.

The purchase contract is long, and it's a legal document you'll be bound by. I give my clients a blank copy, along with a plain-English guide from the California Association of Realtors, as early as I can, so they can get familiar with it before there's any pressure. If you'd like a copy of both before you start looking, reach out and I'll send them over. When it's time to write an offer, I go through it with them page by page before they sign. Sometimes timing is tight and we have to move faster, but I don't skip it. You should know what you're signing.

What goes into an offer

An offer is more than a price. The main pieces are:

• Price. What you're offering to pay.
• Deposit. Often called earnest money. It goes to escrow, usually within 3 business days after your offer is accepted, and counts toward your down payment. It's usually the first money you wire, so confirm the wiring instructions by phone with your escrow officer first. More on wire fraud below.
• Contingencies. Conditions that let you cancel and keep your deposit if something goes wrong. More on these below.
• Closing date. How many days until the sale closes.
• Who pays for what. The contract has checkboxes for common costs and reports, like escrow and title fees, transfer taxes, the Natural Hazard Disclosure report, and any government-required inspections or retrofits. The offer says whether the buyer or seller pays for each. Here, that can include items like the city inspection reports and water fixture requirements from Chapter 6.
• Seller credits and your agent's compensation. You can ask the seller for a credit toward closing costs, and you can ask the seller to cover some or all of your agent's compensation. Both are negotiable.

About your deposit

Around here, a deposit of about 3% of the purchase price is normal. A smaller deposit can make your offer look weaker, and you may get a counter asking for more. There are situations where a different amount makes sense, but it's not the usual case.

If you back out after your contingencies are removed without a valid reason under the contract, you can lose your deposit. This is where the contract's liquidated damages section matters. It's optional, and it only applies if both the buyer and the seller initial it. When it applies to a home you plan to live in, California law generally limits how much of your deposit the seller can keep to 3% of the purchase price.

I'm not a lawyer, so I can't tell you whether to initial it. What I can tell you is that all of my clients do. Ask your agent to walk you through it, or talk to a real estate attorney, before you sign.

The same goes for the mediation and arbitration sections, which affect how disputes get handled if something goes wrong. Read them and ask questions.

When there are multiple offers

Different parts of Monterey County can act like completely different markets at the same time. As I'm writing this, some Salinas neighborhoods are moving quickly, while in places like Carmel Valley, homes are sitting longer and price reductions are more common. Pricing and competition depend on the area, the price range, the time of year, and the house itself, and it all shifts.

When there's competition, buyers sometimes strengthen their offer with a higher price, a larger deposit, shorter contingency periods, or a closing date that works better for the seller.

Contingencies deserve extra care. They're your right under the contract. They give you time to inspect the house and a way to get your deposit back if something goes wrong. Some agents will tell clients to waive them to be competitive. I don't advise that, because if something goes wrong and you need to back out, you could lose your deposit.

A short contingency is usually better than no contingency. In some competitive situations, buyers decide to give up more to get the house, and that decision is theirs. It should depend on how badly you want that specific home and how much risk you're willing to take, not on pressure. If you don't need to give up that protection, don't.

Some sellers also have inspections done before listing and share them with buyers up front. It depends on the seller. They're common, but don't expect one every time. When they're available, reading them before you write an offer can help you decide how comfortable you are with shorter timelines. They don't replace your own inspections.

Deadlines after your offer is accepted

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

• 3 business days: Your deposit is due to escrow.
• 7 days: The seller delivers their disclosures.
• 17 days: Your four main contingencies end: investigation (inspections), appraisal, loan, and insurance.
• Closing: Whatever date the contract says, often around 30 days.

There are a few other contingencies too, like reviewing the seller's documents and the preliminary title report. Those generally run 17 days or 5 days after you receive the documents, whichever is later.

These are defaults, and they can be changed in the offer. In practice, I rarely need more than 17 days for anything. Unless there's a specific reason you need more time for inspections, the appraisal, the loan, or insurance, asking for longer will likely get you a counter, or at least questions from a good listing agent about why.

When a buyer needs shorter timelines to compete, I call their lender first and ask how quickly they can realistically get to clear to close, and how much time they need for the loan and appraisal. I don't want a buyer committing to deadlines their lender can't meet. That way the offer is as strong as it can be for that buyer's actual situation.

One important detail: contingencies in California don't just expire on their own. You remove them in writing. Until you do, you generally keep the protection, but once you sign that removal, you're committed to that part of the deal. The seller also has ways to push you to decide once a deadline passes, so don't let dates slide.

The insurance contingency

The insurance contingency is worth its own note. If you remove it, or write an offer without it, and then back out because insurance is too expensive or you can't get coverage, you could be in breach of the contract. That's one more reason to start shopping insurance as soon as you're in escrow, as covered in Chapter 7.

Inspections

This is your chance to learn as much as you can about the house. Common inspections include:

• A general home inspection. An overall look at the structure, roof, plumbing, electrical, heating, and more.
• A pest inspection. In California, this is a wood destroying pest and organism report. Section 1 items are active problems, like termites or dry rot damage. Section 2 items are conditions likely to lead to problems but with no active damage found yet.
• Specialist inspections, if needed. Roof, chimney, foundation, sewer line, or septic and well inspections for rural properties.

Your inspection period is also when you review the seller's disclosures, the reports from escrow, and anything the city or county provides.

Read everything yourself

It's going to be your house, and investigating it is your responsibility. Read every report and disclosure yourself, not just the summaries. Don't count on your agent to read them and tell you what matters. Something that doesn't stand out to your agent might be a big deal to you, and anyone can miss something. Once you've read everything, your agent can help you work through your concerns.

Asking for repairs or credits

If the inspections turn up problems, you can ask the seller to fix them, give you a credit, or lower the price. The seller can say yes, no, or counter. How much room there is depends on the market, the issue, and how competitive your offer was. Agreed repairs are supposed to be finished at least 5 days before closing.

Local reports during escrow

This is where Monterey County adds its own steps. Depending on the property, escrow may include:

• City inspection reports in cities like Monterey, Seaside, Pacific Grove, and Marina.
• Sewer lateral inspections in some areas.
• The MPWMD water fixture requirements for homes on the Monterey Peninsula.
• Defensible space documentation for homes in High or Very High fire hazard zones.

These are covered in Chapter 6 and Chapter 7. The seller usually orders the city reports, and your agent and escrow officer track them, but it helps to know what they are when they show up.

The appraisal

If you're getting a loan, your lender will order an appraisal to make sure the house is worth what you're paying. The buyer usually pays for it. It commonly runs around $500 to $700, and more for larger or more complex homes. A lot of buyers don't expect this cost, so plan for it.

If the appraisal comes in lower than your price, you generally have three options while your appraisal contingency is still in place: renegotiate the price, pay the difference in cash, or cancel.

The appraisal contingency and the loan contingency are separate. Removing one doesn't remove the other.

Signing your loan documents

About 5 days before closing, you'll sign your loan documents with a notary, often at the title company's office. Bring your ID and anything escrow asks you to bring. The rest of your down payment and closing costs get sent to escrow the way escrow instructs.

One warning: wire fraud is a real problem in real estate. Scammers send fake emails with wiring instructions that look legitimate. Before you wire any money, including your deposit, call your escrow officer at a phone number you already know is real, not one from the email, and confirm the instructions.

The final walk-through

Shortly before closing, you'll do a final walk-through. I usually have my clients do it after they've signed their loan documents. It's not another inspection. It's your chance to confirm that:

• The house is in the same condition as when your offer was accepted.
• Any agreed repairs were done.
• The seller has removed their belongings and anything not included in the sale.

The walk-through gets documented on a form called the Verification of Property Condition. If everything looks good, that gets noted. If something's wrong, like the seller's belongings still in the living room, that gets written down too.

This can matter more than people expect. On one of my deals, the buyer found at the walk-through that the seller had removed a stained glass piece from the front door. The buyer thought it was included, and it was a big part of the home's charm. It turned into a real problem that had to be resolved before closing. If there's something you love about the house, like a light fixture or built-in piece, make sure it's clear in the contract whether it stays.

If something's wrong, it's much easier to sort out before closing than after.

Closing day

In California, the sale officially closes when the deed is recorded with the county. Your lender funds the loan, escrow records the deed, and the house is yours.

Unless you've agreed otherwise, you usually get possession and the keys once the sale records.

If the seller stays for a bit

Sometimes the seller needs to stay in the house for a short time after closing, usually because they're buying their next home. This is called a rent-back, and it's set up with a separate written agreement.

Rent-backs can be great for sellers, but they're not always great for buyers. While the seller is living there, you generally can't go in except in an emergency or to make agreed repairs, and you're essentially their landlord for that time.

The length matters a lot:

• Under 30 days uses a short agreement called the Seller in Possession addendum. You can charge the seller rent.
• 30 days or more uses a full residential lease. That's a bigger commitment with more responsibility for you as the owner, and it's worth talking to your insurance agent about coverage while someone else is living in the house.

Sometimes a longer escrow works better for everyone, if the buyer is open to it and the seller agrees. It gives the seller the time they need without turning the buyer into a landlord.

Where to focus your own research

Most of this process is guided by your agent, your lender, and escrow. The parts worth paying close attention to yourself:

• Your deadlines. Know when each contingency ends, and don't remove one until you're comfortable. I give my clients an escrow timeline with every date on it so nothing sneaks up on them. If your agent doesn't, ask for one.
• Your inspection reports and disclosures. Read all of them yourself, then bring your questions to your agent.
• Your contingencies. They're your right. Understand exactly what you'd be giving up before you shorten or waive any of them.
• Not writing an offer at all. If you like a house but think it's overpriced, you can still write an offer. The seller can say no or counter, but you won't know unless you try. Plenty of buyers wait, then regret it when someone else gets the house.

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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.