Buy Your Home with Confidence,
From A to Z.

In California, the buyers who win are ready before the right house hits the market. The 6–12 months before you buy decide your loan, your rate, and how competitive your offer will be.

The California Market in 2026

California isn't crashing — it's grinding against affordability. The statewide median sits just above $900,000, homes that are priced right still sell in about four weeks, and mortgage rates have climbed back near 7%.

Your 6–12 Month Pre-Game Checklist

12 Months Out

1. Pull all three credit reports free at AnnualCreditReport.com and dispute errors.
2. Stop opening new credit.
3. Find out your county's conforming loan limit — it affects how much you need down.
4. Open a dedicated high-yield home fund.
5. Self-employed? Talk to your CPA about how write-offs affect qualifying income.
6. First-generation buyer? Prepare now for the next CalHFA Dream For All window.

6 Months Out

1. Pay revolving balances under 30% (ideally 10%).
2. Keep old accounts open.
3. Document large deposits.
4. Gather two years of W-2s and tax returns and recent pay stubs.
5. Start collecting homeowners insurance quotes for your target areas.

3 Months Out

1. Get pre-approved — underwritten if you're shopping competitive areas.
2. Choose your agent.
3. Freeze your debt.
4. Tour neighborhoods at different times of day.
5. Have your deposit, down payment, and reserves seasoned 60+ days.

Renting, owning and needing to sell first, or buying with cash — each path has different rules in California.

If You're Renting

• Lease ends in 6+ months: ideal.
• 3–6 months: ask about going month-to-month.
• Under 3 months: don't lock into another year out of panic; a month-to-month premium is cheaper than the wrong house.
• Budget for overlap: California escrows typically run about 30 days.

If You Need to Sell First

In competitive California neighborhoods, sellers often pass on contingent offers. Selling first — or arranging bridge financing — can make your offer much stronger.

Prop 19: Moving Your Tax Base

If you're 55 or older (or qualify as severely disabled or a wildfire/disaster victim), Prop 19 may let you transfer your current property tax base to a replacement home anywhere in California — potentially saving thousands every year. Timing rules apply, and the transfer does not work out of state.

Cash Buyers & Special Situations

Cash buyers can close quickly with no loan or appraisal contingency — a powerful edge in multiple-offer situations.

• Self-employed: two years of returns; bank-statement loans available at higher rates.
• Recent job change: same-field moves are usually fine.
• Gift funds: allowed with a gift letter and paper trail — common in California.
• Co-borrower: a non-occupant co-borrower can help you qualify.

Lenders look at credit, income, and debt-to-income ratio. At California prices, every point of DTI matters.

What It Takes to Buy the Median Home

This is a rough estimate at a 36% housing ratio. Inland markets like Riverside and San Bernardino need far less; coastal Orange County needs more.

Credit Score: What You Actually Need

How to Move Your Score in 90 Days

1. Pay cards under 30%, then under 10% — often worth 20–50 points.
2. Keep old accounts open.
3. Dispute errors now.
4. Avoid hard inquiries for 6 months.

Income: How Lenders Calculate It

• W-2: gross monthly income; two-year history for bonus, overtime, and commission.
• RSUs & stock compensation: common in California — often counted with a vesting history and continuance.
• Self-employed / 1099: two-year average of net income after write-offs.
• Rental income: typically 75% of gross rent. ADU rental income may count in some programs.
• Social Security / pension: fully counted, often grossed up.

Debt-to-Income: The Hidden Killer

Back-end DTI — all debts including your new payment, divided by gross income — usually caps at 43–50%. At California prices, even a $500 car payment can reduce your buying power by roughly $75,000 at today's rates.

At California prices, cash to close is the biggest hurdle for most buyers. Here are the real numbers.

How Much Down Do You Actually Need?

Closing Costs in California

• Lender fees: origination, appraisal, credit, underwriting
• Lender's title policy (buyer)
• Escrow fee (commonly split in Southern California)
• Recording fees
• Prepaid taxes, insurance, and interest

Who Customarily Pays What

Customs differ in Northern California and are always negotiable.

The Real Total: A $900,000 Home, 10% Down

California offers significant help to qualified buyers. Programs, income limits, and funding change often — confirm current terms with an approved lender.

CalHFA Programs

Dream For All Shared Appreciation Loan

• Up to 20% of the purchase price, capped at $150,000, for down payment and closing costs
• No monthly payment; you repay the original amount plus a share of appreciation when you sell, refinance, or transfer
• All borrowers must be first-time buyers; at least one must be a first-generation homebuyer
• Awarded by random selection, not first-come. The 2026 window ran February 24 – March 16. Be pre-approved and ready for the next round.

MyHome Assistance

• Deferred-payment junior loan toward down payment or closing costs
• Paired with a CalHFA first mortgage; income and price limits vary by county

ZIP (Zero Interest Program)

• Deferred, zero-interest loan for closing costs, paired with a CalHFA first mortgage

Local Programs

Many cities and counties — including Los Angeles, San Diego, Riverside, and others — run their own down payment assistance. Windows are short and often lottery-based, so ask your lender which ones pair with your loan.

Specialty & Federal Programs

• WISH (FHLBank San Francisco): matching grants up to 4-to-1 for eligible first-time buyers through participating banks.
• FHA: 3.5% down within county FHA limits.
• VA: 0% down with no monthly mortgage insurance; VA loans can go above conforming limits for eligible veterans.
• USDA: 0% down in eligible areas, mostly inland and rural.
• Conventional 97: 3% down through HomeReady or Home Possible.

In California, the strength of your approval is part of your offer.

In competitive neighborhoods, an underwritten pre-approval lets you shorten your loan contingency with confidence — one of the best ways to beat a higher offer without overpaying.

Documents You'll Need

• 30 days of pay stubs; 2 years of W-2s
• 2 years of tax returns; business returns and YTD P&L if self-employed
• RSU / stock vesting statements if applicable
• 2 months of statements for all accounts
• Gift letter and donor documentation if applicable
• ID; divorce decree if applicable

Shopping Lenders

Mortgage credit pulls within a short shopping window count as one inquiry. Compare Loan Estimates from at least three lenders — especially for jumbo loans, where pricing varies widely.

You'll work with an agent, lender, inspector, and escrow officer — plus title and sometimes specialized inspectors.

Your Agent

You'll sign a written buyer-agent agreement before touring. Compensation is spelled out there and is negotiable; sometimes the seller covers part or all of it.

• Licensed with the California DRE and active in your target areas
• Knows local contract norms and how listing agents in that area choose offers
• Strong network of lenders, inspectors, and contractors

Your Lender

• Experience with jumbo loans and/or CalHFA, depending on your price range
• Proven ability to close on a 17- to 21-day contingency timeline
• Licensed; verify on NMLS Consumer Access

Your Escrow & Title

In Southern California, escrow and title are often separate companies. Escrow holds funds and coordinates documents; title insures ownership. Your agent will recommend both.

Your Inspectors

• General home inspector
• Termite (wood-destroying organisms) inspector
• Sewer lateral camera inspection for older homes
• Roof, chimney, foundation, or geology specialists as needed

California homes carry risks you won't see in most states. Know them before you fall in love.

Setting Search Criteria

• Max price — know where conforming ends and jumbo begins
• Commute and school needs
• HOA and Mello-Roos tolerance
• Condo vs. single-family (condo HOA insurance and reserves matter)
• Must-haves vs. nice-to-haves

California-Specific Things to Inspect

Insurance & Fire Risk

Homeowners insurance is the #1 surprise for California buyers. In high fire-hazard areas, some carriers won't write new policies, and buyers may need the California FAIR Plan plus a wrap-around policy. Get a real quote during your contingency period — before you remove it.

Seismic

Check for foundation bolting, cripple-wall bracing, and chimney condition in older homes. Review the Natural Hazard Disclosure for fault and liquefaction zones. Earthquake insurance is separate from homeowners insurance.

Sewer Lateral

Older clay sewer lines crack and fill with roots. A camera inspection costs a few hundred dollars and can reveal a $10,000+ repair.

Termites

Reports split findings into Section 1 (active infestation or damage) and Section 2 (conditions likely to lead to it). Negotiate who covers each.

Permits & ADUs

Unpermitted additions and ADUs are common. Compare the home to county records — unpermitted space can affect value, insurance, and financing.

Hillside, Drainage & Coastal Issues

• Geology and drainage reports on slopes
• Coastal properties may face bluff erosion or Coastal Commission rules
• Pools, retaining walls, and older electrical panels deserve a close look

California offers are written on the C.A.R. Residential Purchase Agreement (RPA).

• Purchase price and initial deposit (typically ~3%)
• Loan terms and down payment
• Investigation contingency (default 17 days)
• Appraisal contingency (default 17 days)
• Loan contingency (default 17 days)
• Close of escrow — usually 30 days
• Who pays which costs (escrow, title, transfer tax, termite)
• Seller credits toward your costs

Pricing Strategy Right Now

• Desirable neighborhoods: expect competition. Lead with an underwritten approval, a solid deposit, and realistic, shorter contingency timelines.
• Homes past 30 days: there's room to negotiate price, credits, or repairs.
• Offer deadlines: many listings set a review date — submit your best terms the first time.
• Escalation clauses: can help, but set a firm ceiling.

Seller Credits: The Underused Tool

With rates near 7%, a seller credit toward a rate buydown can lower your monthly payment more than a comparable price cut. Typical caps: FHA up to 6%; VA 4% plus customary costs; conventional 3% (under 10% down), 6% (10–25% down), 9% (over 25% down). Jumbo lenders set their own limits.

Once your offer is accepted, escrow opens and your contingency clocks start.

Requesting Repairs

After inspections, you can submit a Request for Repair. The seller responds, and you negotiate. Focus on safety, structural, and major systems — credits often work better than seller-managed repairs.

California Disclosures

• TDS: Transfer Disclosure Statement — the seller's core disclosure.
• SPQ: Seller Property Questionnaire — goes deeper.
• NHD: Natural Hazard Disclosure — flood, fire, earthquake zones.
• AVID: Agent Visual Inspection Disclosure.
• Megan's Law database notice.
• Lead paint for pre-1978 homes.
• HOA documents — budget, reserves, CC&Rs, minutes, and any litigation.

The appraisal and final underwriting are the last hurdles.

If the Appraisal Comes In Low

1. Renegotiate to appraised value
2. Bring cash to cover the gap
3. Split the difference
4. Cancel if your appraisal contingency is still in effect

In multiple-offer situations, some buyers offer to cover a limited appraisal gap. Only do this with cash you truly have to spare.

Clear to Close

• Updated statements and sourced deposits
• Verbal verification of employment
• Final pay stub
• Letters of explanation
• Title issues resolved
• Proof of homeowners insurance

Final Walk-Through

• Test appliances, HVAC, water heater
• Run faucets and toilets
• Confirm repairs and receipts
• Check included items
• Look for move-out damage

California signings usually happen a few days before recording, often with a mobile notary.

What to Bring

• Government photo ID
• Wire confirmation for your funds
• Proof of insurance
• Your spouse if applicable — California is a community property state

The First 30 Days

1. Change the locks
2. Set up utilities before closing
3. File the Homeowners' Exemption with your county assessor (it lowers your assessed value by $7,000)
4. Watch for your supplemental property tax bill
5. Update your address
6. Keep your closing packet for taxes
7. Consider earthquake insurance

First-Year California Maintenance

• Clear defensible space and gutters before fire season
• Check the roof and drainage before the rainy season
• Service HVAC
• Inspect water heater strapping and smoke/CO detectors
• Annual termite check

The same mistakes cost California buyers homes and money year after year.

1. Removing contingencies before the loan and appraisal are solid
2. Getting insurance quotes after the contingency period
3. Ignoring the supplemental tax bill and Mello-Roos
4. Not checking conforming vs. jumbo limits before shopping
5. Skipping the sewer lateral or seismic review on an older home
6. Overlooking unpermitted additions
7. Writing a weak first offer on a well-priced home
8. Financing a car or furniture during escrow
9. Falling for wire fraud

Keep this handy — you'll hear every one of these terms.

• AVID: Agent Visual Inspection Disclosure.
• Conforming limit: Maximum loan size for standard Fannie/Freddie loans; higher in high-cost counties.
• Contingency removal: Written release of a contingency; puts your deposit at risk for that item.
• Dream For All: CalHFA's shared-appreciation down payment program.
• FAIR Plan: California's insurer of last resort for high-risk properties.
• Jumbo loan: A loan above the conforming limit.
• Mello-Roos: Special taxes in some newer communities.
• NHD: Natural Hazard Disclosure.
• Prop 13: Caps annual increases on assessed value.
• Prop 19: Lets qualifying owners transfer their tax base within California.
• RPA: C.A.R. Residential Purchase Agreement.
• Section 1 / Section 2: Termite report categories: active issues vs. conditions likely to cause them.
• Supplemental tax: A catch-up property tax bill after purchase.
• TDS / SPQ: Seller disclosure forms.

The 90-Day Pre-Buying Checklist

1. Pull credit and dispute errors
2. Pay cards under 30%
3. Confirm your county's loan limits
4. Save and season your funds
5. Gather income and asset documents
6. Get an underwritten pre-approval
7. Check CalHFA and local DPA eligibility
8. Choose your agent
9. Get insurance quotes for target areas
10. Define neighborhoods and criteria

The Showing Checklist

1. Roof and age
2. Foundation and seismic retrofit
3. Sewer lateral age
4. Electrical panel
5. Permits vs. actual square footage
6. Fire zone and insurance availability
7. HOA and Mello-Roos
8. Drainage and slope
9. Noise and traffic
10. Property tax estimate at your price

A Final Word

Buying in California takes more preparation than almost anywhere in the country — but it's absolutely achievable. Prices have steadied, well-prepared buyers are still winning, and assistance programs can make a real difference. Get approved, know your numbers, and move with confidence when the right home appears.