How to Buy a House in California | 9 Easy Steps & Tips

In 2025, California's real estate market presents ample chances for homebuyers. The median home price increased by 4.2% in December 2024 because of high demand. However, some places, like San Francisco, saw prices drop significantly. The average listing price there dropped by 10.9%.

If you choose wisely, now could be an excellent time to buy a home in California. This guide shows you how to buy a house in California. It includes details on financing, inspections, appraisals, and documentation.

From budgeting to closing, we cover everything you need to confidently purchase a house in California. Simplify your home-buying journey with these 9 actionable steps:

Before diving into house hunting, evaluate your financial situation. Consider your income, savings, and other expenses. Use online tools like mortgage calculators to estimate monthly payments based on different price points.

Understand additional costs like:

• Closing costs (2% to 5% of the house price)
• Property taxes in California
• Homeowners Insurance
• Maintenance and repairs.

Get Pre-Approved for a Mortgage: This step not only shows sellers you're serious but also helps you understand how much you can afford. Mortgage pre-approval can speed up the buying process and improve your negotiating position.

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California offers various financing options to suit different needs. The three most commonly used options are:

• Conventional Loans: The baseline conforming loan limit for single-family homes is $806,500 for 2025. It's higher in expensive areas.
• FHA Loans: These are ideal for first-time buyers or those with lower credit scores. FHA loan limits range from $524,225 to $1,209,750 depending on the county.
• VA Loans: For veterans and active-duty military members, VA loans offer favorable terms without requiring a down payment.

House hunting can be both exciting and overwhelming. You can make it easier by:

• Defining your needs
• Researching neighborhoods
• Using online resources
• Attending open houses.

Start by determining what you want in a home, such as the number of bedrooms, location, amenities, and then prioritize these features. Next, explore various areas in California that align with your lifestyle and budget, considering local schools, available amenities, and community vibes.

You can use reAlpha’s AI Real Estate Agent which uses advanced AI to find home listings that match your criteria. Also, it provides insights into local market trends. Finally, visiting open houses allows you to better understand what you desire and helps you gauge the market effectively.

An expert agent is your asset during your home-buying journey. Look for agents with a wealth of experience in the California market, as they can offer insights into local trends. It's important to check their qualifications. Make sure they are licensed and have good reviews from past clients.

In addition, choose an agent who listens and understands your needs. A skilled agent will not only guide you through the process but also advocate for you during negotiations.

Winning in California's competitive real estate market requires strategic planning and quick action. First, show sellers you're serious by getting pre-approved, and you'll close faster.

• Make a Competitive Offer: Look at similar sales nearby to find a fair offer price. Think about adding an escalation clause. This lets your offer increase automatically if there are competing bids.
• Flexible Terms: Be open to adjusting your terms to meet the seller's needs. For example, you could accommodate their timeline or waive contingencies if you feel confident about the property.

In California, inspections and appraisals play important roles in the home-buying journey. Home inspections are optional, but highly recommended. They assess the property's condition and find issues, like structural damage or plumbing problems. A thorough inspection can prevent costly repairs down the line.

👉 Always carry a detailed home inspection checklist to ensure no property detail is overlooked.

On the other hand, lenders require home appraisals as they set the home's market value. This ensures the loan amount matches the property's worth. Appraisers consider various factors. These include location, condition, and recent sales of comparable homes.

When it comes to costs, buyers should anticipate spending between $350 to $500 for inspections and $400 to $600 for appraisals. These expenses usually fall on the buyer and are crucial to be factored in for making informed decisions.

When selecting a lender, it’s important to pick one with a strong reputation and experience in California's market. Good communication with both your lender and real estate agent will help ensure a smooth process.

To simplify underwriting, gather essential documents, including income verification, tax returns, and bank statements. Work closely with your lender to complete all paperwork on schedule, preventing any delays in closing.

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Closing day is an exciting milestone in your home-buying journey. Do a final walk-through of the property before closing. This is your chance to ensure that any agreed-upon repairs have been made and that the home is in the expected condition.

In California, buyers usually sign closing documents one to three days before the official closing day. They do this at a title company or via a mobile notary. After signing, documents are sent to your lender for final review. If everything checks out, funds will be released on closing day.

Next, the title company will record your deed with local authorities. This officially transfers ownership of the property to you. Be prepared for some paperwork, but remember that this is a significant step towards homeownership.

Congratulations! After navigating through the complexities of buying a home in California, you're now officially a homeowner.

Take time to celebrate this achievement. Give Your Home a Personal Touch. Start arranging and decorating your furniture to reflect your style.

Buying a house in California is costly. You must pay the home price, closing fees, and a 3% commission, which is unavoidable for most buyers. This additional expense often surprises first-time homebuyers, increasing their overall budget.

Now, avoiding the 3% commission is easier than ever with reAlpha, an AI-powered, commission-free real estate platform. reAlpha eliminates traditional buyer commissions, saving you thousands. Its 24/7 AI real estate agent simplifies home buying. It offers personalized insights and instant guidance. This makes your California dream home more affordable.

The first step is determining your budget and getting pre-approved for a mortgage. This ensures you know your financial limits and strengthens your position in a competitive market.

A general home inspection is important to assess the property's condition. Depending on the property and location, additional inspections may be needed. These include termite, mold, and foundation checks.

Closing costs typically include lender fees, title insurance, escrow fees, and property taxes, amounting to 2-5% of the home price. Review the Closing Disclosure to understand these expenses clearly.

Save Big when you Buy a Home with reAlpha!

Discover how our all-in-one homebuying platform can increase your buying power and put money back in your pocket. Start your journey today!

Sign up for free