The Homebuying Process in California, Step by Step
By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.
The homebuying process in California runs in seven stages: get your finances ready, get preapproved, sign a buyer agreement and search, make an offer, open escrow and complete inspections and the appraisal, remove contingencies, and close. From preapproval to keys, most financed purchases take roughly two to three months, with escrow itself often 30 to 45 days.
Each stage has its own documents and deadlines. Knowing them in advance keeps you from rushing decisions or missing a contract date. Below is how each step works in practice in Sonoma, Napa, Marin and the wider Bay Area, with the 2026 rules that changed since many older guides were written.
Stage 1: Get your finances ready
- Check your credit. Pull your reports for free at AnnualCreditReport.com and dispute errors early. Fixes can take weeks.
- Know your full monthly cost. Add principal and interest, property tax (in California, a base 1% of the price plus local assessments), homeowners insurance, HOA dues and any mortgage insurance.
- Save for more than the down payment. Plan for closing costs, moving and early repairs, and keep an emergency fund.
- Look at assistance programs. CalHFA offers first mortgages and the MyHome down payment loan for eligible buyers. Availability and limits change, so confirm with a CalHFA-approved lender.
For local numbers, see mortgages and affordability in Sonoma County.
Stage 2: Get preapproved
A preapproval means a lender has checked your credit, income and assets and will lend up to a set amount, subject to the property. You will typically need:
- Recent pay stubs and two years of W-2s or tax returns
- Two to three months of bank and investment statements
- Photo ID and details on any debts
Compare at least two lenders. Each must send a Loan Estimate within three business days of your application. For context, Freddie Mac’s survey put the average 30-year fixed rate at 7.32% for the week of October 22, 2026; your quote will depend on credit, down payment and loan type. FHFA’s 2026 conforming loan limit is $832,750 for a one-unit home in most areas, up to $1,249,125 in high-cost counties. Larger loans are jumbo loans with stricter terms. Our financing page explains the main loan types.
Stage 3: Choose an agent and search
Since January 1, 2025, California requires a written buyer representation agreement, signed no later than when you make an offer. It must spell out the agent’s compensation and services and expire within three months. Commissions are negotiable, and the agreement can say who pays.
Then define the search:
- Must-haves versus nice-to-haves: bedrooms, lot size, commute, garage, single-level living.
- Target towns. Try property search and compare areas like Santa Rosa, Petaluma or Napa by price and commute.
- Property type. Rural homes may have wells, septic and private roads. Condos have HOA rules and reserves.
At showings, take notes and photos, check water pressure and windows, and ask about the age of the roof, HVAC and water heater.
Stage 4: Make an offer
Your agent will prepare a written purchase agreement, usually on the California Association of REALTORS form. Key terms:
| Term | What it means |
|---|---|
| Price | Based on recent comparable sales, not just list price |
| Initial deposit | Good-faith money held by escrow, often around 3% in California |
| Contingencies | Your rights to cancel over inspection, appraisal or loan problems, each with a deadline |
| Close of escrow | The target closing date, often 30 to 45 days out |
| Seller concessions | Credits toward closing costs or repairs |
In a multiple-offer situation, terms such as a shorter contingency period or a flexible close date can carry weight. See how to compete in a bidding war and how to respond when you receive a counter-offer.
Stage 5: Escrow, inspections and the appraisal
Once the seller accepts, escrow opens and your deposit is due, usually within three business days. Then:
- Disclosures. Review the Transfer Disclosure Statement, Natural Hazard Disclosure and seller questionnaire carefully.
- Inspections. Order a general home inspection, then specialists as needed: roof, sewer lateral, pest, chimney, and well and septic for rural homes.
- Fire zone documentation. In High or Very High Fire Hazard Severity Zones, the seller must provide defensible space documentation, or you agree to obtain it within a year of closing.
- Insurance. Get a binding homeowners insurance quote early. In some wildfire-exposed areas, coverage takes time to arrange.
- Appraisal and title. The lender orders the appraisal. Review the preliminary title report for easements and liens.
Stage 6: Remove contingencies
By each deadline, you either remove the contingency in writing, negotiate repairs or credits, or cancel. Once you remove the loan contingency, your deposit can be at risk if financing falls through, so confirm with your lender first. Avoid new credit or job changes until after closing.
Stage 7: Close and move in
- Receive your Closing Disclosure at least three business days before closing. Compare it with the Loan Estimate.
- Do a final walkthrough to confirm repairs and condition.
- Verify wiring instructions by phone with escrow at a number you found yourself. Never trust instructions sent only by email.
- Sign loan documents with a notary. The deed records with the county, and you get keys as agreed.
After closing, expect a supplemental property tax bill as the county reassesses the home at your purchase price.
Questions people ask
How long does the homebuying process take?
Plan for about two to three months from preapproval to closing for a financed purchase, depending on how long the search takes. Cash purchases can close faster.
How much money do I need up front?
You will need the initial deposit when escrow opens, inspection fees during escrow, and the balance of your down payment and closing costs at closing.
Can I back out after my offer is accepted?
Yes, within your active contingencies and following the contract’s notice rules. After you remove them, cancelling can cost you your deposit.
Do I need a buyer’s agent?
It is not required, but an agent can price offers, manage deadlines and coordinate inspections. If you use one, a written agreement is now required in California.
For the step-by-step tasks, keep our home buyer checklist handy. When you are ready to talk about a purchase in wine country or the Bay Area, see how we guide buyers through each stage.
Sources & notes
- California Department of Real Estate, Changes to Real Estate Representation
- FHFA, Conforming Loan Limit Values for 2026
- Freddie Mac, Primary Mortgage Market Survey (October 22, 2026)
- CFPB, What is a Loan Estimate?
- CFPB, Closing Disclosure
- CalHFA, Homebuyer Programs
- Orange County Fire Authority, Civil Code 1102.19 summary
- General information only, not legal or lending advice.
Last reviewed October 2026 by Matthew Martinez.
