Updated August 17, 2026
Sellers treat the accepted offer as the finish line. It is closer to the starting gun. Everything that determines whether the deal closes — and at what price — happens in the weeks afterwards, and a seller who understands the sequence can see problems coming instead of reacting to them. Here is what actually happens on a Los Angeles multifamily escrow, in order, and where each stage tends to go wrong.
Escrow is opened, the buyer wires the initial deposit, and the clock on every contractual period starts. Read the agreement and diary the dates the day it opens — diligence expiry, financing contingency, deposit hard dates, closing. Most escrow problems are date problems that nobody was tracking.
Where it goes wrong: the deposit is late, or smaller than agreed. That is a signal, not an administrative delay.
You provide what the agreement requires — leases, rent roll, operating statements, service contracts, permits, the compliance file, insurance loss runs, and your disclosures.
Where it goes wrong: delivering slowly, or in pieces. Every gap generates a request, every request generates a wait, and the diligence clock frequently gets extended to accommodate delays the seller caused. The buildings that close cleanly are the ones where this package was assembled before the listing.
The buyer inspects, orders reports, reviews the financials, pulls the rent registry and permit history, and orders their insurance quote. On a Los Angeles building this is also where the compliance record gets read properly.
Where it goes wrong: discoveries. The seller's leverage in this stage is entirely a function of what was disclosed up front. A known item reflected in the price is very hard to renegotiate. The same item discovered here is a negotiation.
Tenants are asked to confirm rent, deposit, lease terms and any side agreements. On a multifamily deal this is often the single most consequential document set, because it is where the rent roll meets what tenants actually believe.
Where it goes wrong: discrepancies, and non-responders. Neither is fatal if handled openly. Both are damaging if the seller appears to have known.
Appraisal, lender underwriting, borrower approval. On an assumption this runs 45 to 90 days on its own timeline.
Where it goes wrong: a low appraisal, particularly on a rent-stabilized building where in-place income sits far below market. Also lender-required repairs, and insurance the lender will not accept.
The buyer removes contingencies and the deposit typically goes hard. This is the moment the deal becomes a deal. Before it, you have an option. After it, you have a buyer with money at risk.
Where it goes wrong: extension requests. One is normal. A pattern of one-week extensions is a buyer keeping their option alive, and a seller should ask directly what remains outstanding and require the deposit to increase in exchange for time.
Title and escrow assemble the settlement statement. Prorations are calculated — rents, deposits, taxes, utilities. Loan payoff demands are ordered, including any prepayment or defeasance cost. Transfer tax including Measure ULA is computed. Your Form 593 for California withholding is completed and returned.
Where it goes wrong: payoff surprises. A prepayment penalty nobody quoted, a PACE assessment on the tax bill, or an equipment lien surfacing at the last moment. All three are avoidable by ordering the figures early.
The buyer funds, the deed records, proceeds are disbursed. Deposits and prorated rents transfer to the buyer. Keys, files, and the tenant records go over.
Where it goes wrong: rarely, and usually a wire timing issue. Recording deadlines are earlier in the day than sellers expect.
Keep operating the building normally. Repairs, maintenance, services — all continue exactly as before. Letting things slide during escrow is both a habitability exposure and a reason for the buyer to reopen the condition conversation.
Do not change the tenant situation. No increases, no notices, no buyout conversations mid-escrow unless already agreed and disclosed. This is where tenant complaints get filed, and a complaint during escrow is expensive.
Respond fast. Speed builds goodwill you will want later if something genuine surfaces.
Keep the backup buyer warm, in writing. The single best protection against a retrade is a credible alternative.
Watch the dates. Every date in the agreement, in a calendar, with reminders a week ahead.
There is no universal number, and it depends mostly on the buyer's financing and how prepared the seller was.
A seller in a 1031 exchange should be especially attentive here, because the identification and closing deadlines do not move for anyone.
It happens. The question is whether the request is legitimate.
Legitimate: a genuinely new, material finding with a number attached — a failed sewer line, a capital item at end of life, an insurance cost far above the operating statement, a registry discrepancy.
Not legitimate: cosmetics, normal wear, or anything visible when they bid.
Your response depends on your alternatives. With a credible backup, the conversation is short. Without one, it is longer — which is the argument for running a process that produces more than one buyer in the first place.
Can I keep the deposit if the buyer walks?
It depends on where in the timeline they walk and what the contract says. Before contingency release, generally no. After, the deposit is typically the seller's liquidated damages. This is why the release date matters more than the offer date.
Should I keep showing the building during escrow?
Many sellers continue accepting backup offers in writing. It does not interfere with the buyer under contract and it means a failed deal is not a restart from zero.
What if a tenant refuses to sign an estoppel?
Disclose it and address how the risk is allocated. Purchase agreements typically anticipate non-responders, often with a seller representation as a partial substitute.
Who pays for what at closing?
Custom in Los Angeles allocates most items in a standard way, and everything is negotiable. What matters is that the allocation is written into the agreement rather than assumed — and that your net sheet reflects it from the first conversation.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →