How to Buy a House in California

Houses in San Francisco.
Houses in San Francisco. (Image: Medioimages/Photodisc/Photodisc/Getty Images)

Finding a home and negotiating a deal are only the initial stages of homebuying in California. The process usually takes a month or more because you must gather certain facts about the property and prepare your financing. Sellers aren't privy to all of the details about a home's condition. Get a general home inspection and order specialized inspections if uncertain about termites, mold, septic systems and other features. As a California homebuyer, you should automatically expect certain disclosures, however, beyond state-mandated forms, the burden to investigate a property falls upon you. Carefully review seller disclosures when buying a home and follow it up with your own research.

Using California's Contract

Write your offer on the statewide contract known as the Residential Purchase Agreement and Joint Escrow Instructions, provided by the California Association of Realtors. When submitting an offer through a real estate broker -- either the seller's or your own buyer's agent -- the broker supplies the contract. Once accepted by the seller, the eight-page agreement instructs the escrow holder on how to prepare for settlement, or closing, in terms of fee allocation, time frames, home price, home financing details and other conditions.

Finding Out Material Facts

California sellers must disclose certain information about a home's physical condition, namely, any known defects that help you make an informed decision about buying the home. They provide known material facts on a Transfer Disclosure Statement, which lists the home's features such as appliances, safety mechanisms, heating, cooling and utility components. The TDS also requires sellers to disclose significant structural problems, health and safety hazards, property line issues and property modifications. California real estate agents mandatorily disclose their own findings on the TDS, and commonly, on an Agent Visual Inspection Disclosure form, although an AVID isn't state-mandated.

Knowledge About Natural Hazards

Certain areas of California are more prone to natural disasters than others. Sellers disclose such perils via a Natural Hazard Disclosure Statement. The report states the home's relative location to seismic activity, flood zones, land slides and other natural hazards. In addition to the NHD report, certain California counties and their real estate boards may produce localized disclosures about neighborhoods. Although these aren't state-mandated, real estate brokers commonly require sellers to supply local area disclosures, which provide information about nearby water-treatment plants, airports, forests, rock slides and other facts that can help you make an informed decision about buying the home.

Ensure Insurability

As perhaps your biggest asset, your new home requires homeowners insurance, also known as hazard insurance. When financing a home, your lender requires you to maintain a certain amount of coverage. Make sure your property qualifies for sufficient insurance before you buy a house in California. Earthquake and flood insurance don't come with regular homeowners coverage and may be required in the more vulnerable areas of the state. The additional coverage can significantly increase your monthly housing expenses.

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