This is the second in a two-part series that explains how to buy a home…
Welcome to the California home buying guide! This page offers an overview of the home buying process in California and is geared toward first-time buyers in particular. It also works as a table of contents, giving you access to our vast library of home buying tutorials.
California Home Buying Process at a Glance
This guide offers a step-by-step overview of the home buying process in California. While the process can vary slightly from one buyer to the next, most people follow the same general path. Here are some of the common steps along that path.
Step 1: Create a budget and start saving money.
When buying a home in California, you’ll likely have to pay for closing costs. These costs include a variety of mortgage-related and third-party fees, and can easily add up to thousands of dollars. So one of the best things you can do right now is to start saving money. You’ll also want to create a basic home-buying budget, to identify the maximum monthly payment you’re comfortable with.
Step 2: Research your local real estate market.
Real estate market conditions can change dramatically from year to year, and also from one city to the next. Some markets might favor sellers, while others are more “buyer-friendly.” So, as a first-time buyer in California, you can benefit from doing some local market research. You can use the internet to research local home prices, inventory levels, sales activity, etc. This will pay off later, when you’re ready to start the house hunting process.
Step 3: Review your credit situation.
If you plan to buy a house within the next few months, you might want to review your credit reports. These reports contain information about your past borrowing history, including auto loans, credit cards, and the like. They’re also used to create your credit score, a three-digit number that lenders use when reviewing loan applicants. A higher score could help you qualify for a mortgage loan with a favorable interest rate.
Step 4: Learn about your mortgage options.
This is an optional step in the California home buying process, but highly recommended. By researching your mortgage options ahead of time, you’ll be able to ask the right questions later on. Fixed-rate vs. adjustable. Conventional vs. government-backed. Conforming vs. jumbo. You have a lot of options! So we’ve created some informative guides to help you learn about them.
- Types of mortgage loans in California
- Fixed versus adjustable-rate loans
- Basic mortgage requirements for borrowers
Step 5: Get pre-approved for a mortgage loan.
Mortgage pre-approval can help prepare you for the house hunting process (step #6 below). During pre-approval, you’ll find out how much you’re able to borrow with a mortgage loan. This in turn can help you tailor your home search to a specific price range. Having a pre-approval letter from a mortgage company could also make sellers more inclined to accept your offer.
Step 6: Start the house hunting process.
You’ve established a budget. You’ve researched the different types of mortgages. You’ve been pre-approved by a lender. Now it’s time for the most exciting part of the process. It’s time to look at houses! House hunting is one of the key steps in the California home buying process. It can also be a little intimidating, if you’ve never been through it before. So we’ve created some guides to help you navigate the process.
Step 7: Make an offer on a house.
Once you’ve found a home that meets your needs and falls within budget, you’re ready to make an offer. This is another important step in the California home buying process, and for obvious reasons. It determines how much you’ll pay for the property, along with other details like the closing date, contingencies, etc. Here are some tips for navigating this stage of the process:
Step 8: Have the home inspected (optional).
Home buyers are not required to have a property inspected before purchasing it. But it usually makes sense to do so. A home inspection will help you understand the true condition of the house you’re buying, as well as potential repairs that might be needed. As a buyer, you also have the option to include an inspection contingency within your contract.
- Are home inspections required?
- Difference between appraisal and inspection
- Using a home inspection contingency
Step 9: Finalize the closing and move into your house!
From a buyer’s perspective, closing represents the final step in the California home buying process. This is where you sign all of the finalized documents relating to your mortgage loan, property transfer, taxes, etc. You’ll also pay your closing costs, usually in the form of a cashier’s check or wire transfer. Here are some closing-related articles where you can learn more:
We hope you’ve enjoyed this guide to the home buying process in California. If you have mortgage-related questions or would like to get pre-approved for a loan, please contact our staff!