Steps to Buy a House in California

By Karina C. Hernandez Updated December 09, 2018

Finding the right home is just one step in trying to buy a house in California. If you’re like most homebuyers, you need a mortgage to finance your home purchase. A mortgage lender and real estate agent are two of the most important professionals you’ll need in the process. You will also deal with many other entities throughout the various steps of the homebuying process. Adherence to contract details and your finances are critical to making California your new home.


Put yourself in a position of strength when making an offer on a house by submitting the offer with a hefty deposit to show the seller how serious you are.

Gauge Your Financial Fitness

You can gauge whether you will qualify for a home loan for a California home by asking yourself a few questions. Have you received stable income from an employer or another verifiable source for the past two years? Is your credit score at least a 620, and can you pay off any delinquent or excess debt, if needed? Have you paid your current housing costs – rent or mortgage – on time for the past 12 months? If you answered “yes” to all of these, you are likely financially ready to buy. If you answered “no,” you may have trouble getting a loan to buy a house and may need to work on your credit and finances before searching.

Get Pre-Approved for a Mortgage

Many of California’s housing markets, especially the San Francisco Bay Area and most coastal cities, are competitive, with a single home receiving multiple offers. Competing cash offers, multiple bids and high down payments or earnest money deposits can give a homebuyer the edge. Having a pre-approval in hand that states you are qualified to finance a home purchase because your credit, income and assets meet the lender’s guidelines, can also help you. Pre-approval shows the seller you have started the loan approval process and are well on your way to getting financing with the right home. You can obtain as few as one pre-approval before starting your home search; however, real estate professionals recommend getting pre-approved with more than one lender to get the best terms.

Ways to Find A Home

You can either begin your home search by selecting a real estate agent or broker from the get-go, or shop around until you talk to an agent you want to work with, who will then find the home for you. Most California homes are listed by members of the California Association of Realtors. You can search for a a real estate agent online through various real estate websites that promote individual agents or walk into a real estate brokerage in the area you would like to buy in. You can also visit open houses and drive by listed homes, where you’ll find an abundance of real estate agents eager to help. If you call an agent based on a home’s “for sale” sign, consider that using that agent to represent you in the purchase of that specific home is considered dual agency. Dual agents work for both the seller and buyer, and must work in the interest of both sets of clients.

Making Offers And Getting One Accepted

You can buy a house after making many offers on multiple properties or score the first home you make an offer on. Results vary by homebuyer and housing market, with the more competitive markets requiring multiple attempts and rejections. If you are not in a hurry to buy a home, bidding on multiple homes may not be an issue. But if you’re on a time crunch, say because you want to be in your new home before the kids start school, you may have to bid more aggressively and concede certain terms to get your offer accepted over the rest. For example, offer at or over the asking price, forgo or waive certain contingencies or conditions, such as the home inspection or appraisal. Discuss any terms that you are willing to bend on with your agent and consider the agent’s advice before making an offer. Brokers do not recommend waiving your inspections, loan or appraisal contingencies, unless you’re absolutely sure you want the home regardless of these.

Do Your Due Diligence

Time is of the essence, once your offer is accepted. The California Association of Realtors “Residential Purchase Agreement and Joint Escrow Instructions” act as both your offer and the sales contract. The default timeline for which you can perform your due diligence, such as gain full mortgage approval is 21 days, but may be shorter or longer if you negotiated differently. The timeline for inspecting the property and investigating aspects such as the home’s title is 17 days. These also may be shorter if previously negotiated otherwise. In California, many new communities and complexes are subject to homeowner’s associations. Reviewing the HOA’s documents and rules are also part of your due diligence. Upon expiration of your due diligence timelines, you must remove or waive the corresponding contingency, which essentially forfeits your deposit to the seller if you decide to cancel due to the property or your loan.

Attend Inspections

One contingency to your offer is the home inspection. Be there when the inspector delves into the condition of the home. If you are satisfied with the report, your agent will inform the seller that the sale can proceed. If work needs to be done, negotiation over who will make those repairs will ensue.

Line Up Utility Accounts and Homeowner’s Insurance

Your work isn’t done yet. You need homeowner’s insurance if your lender is going to give you a mortgage. This protects their investment. Even if you are paying cash, homeowner’s insurance covers you against any loss. And don’t forget to inform all utilities of a starting date for their service and get the account switched into your name.

Get the Keys to Your New Home

Closing day is stressful as well as rewarding. Piles of documents need to be signed and you may come face-to-face with the seller at the closing table. Usually it all goes well, but when the seller is adversarial the room’s temperature may rise. The reward is the handing over of the keys. Congratulations – you’ve just bought a home.

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