How to Buy a Home in California: Step-by-Step Guide for 2026

California’s median listing price was $730,000 in August 2026, and the median days on market was 53 (Realtor.com® Economic Research). What changes the purchase most: your closing runs through a state-licensed escrow company (Cal. Fin. Code § 17200).

How a California purchase closes

State law defines escrow: any sale, transfer, encumbering, or leasing in which one person “delivers any written instrument, money, evidence of title to real or personal property, or other thing of value to a third person to be held by that third person until the happening of a specified event or the performance of a prescribed condition” (Cal. Fin. Code § 17003(a)).

Running that role is licensed work: “It shall be unlawful for any person to engage in business as an escrow agent within this state except by means of a corporation duly organized for that purpose licensed by the commissioner as an escrow agent” (Cal. Fin. Code § 17200). Four exceptions apply (§ 17006(a)): banks, trust companies, building and loan or savings and loan associations, credit unions, and insurance companies; attorneys with a bona fide client relationship who are not actively in the escrow business; title abstract and search firms; and real estate brokers acting as agent or party in the deal. The attorney and broker exemptions are personal, may be delegated only to staff under their direct supervision, and cannot serve an arrangement performing escrows for more than one business (§ 17006(b)).

Title insurance rates are filed, not promulgated. The statute’s own words: “to permit and encourage competition,” not to hand the commissioner “power to fix and determine a rate level” (Cal. Ins. Code § 12401). Each title insurer, underwritten title company, and controlled escrow company files its own schedules (Cal. Ins. Code § 12401.1), effective no earlier than the 30th day after the commissioner receives them and after 30 days on public display in each county office (§ 12401.7). Ask each company for its filed rate; budget the rest with our closing cost calculator.

The documentary transfer tax: county option, city add-ons

The Documentary Transfer Tax Act lets “the board of supervisors of any county or city and county” impose a tax at “fifty-five cents ($0.55) for each five hundred dollars ($500) or fractional part thereof” (Rev. & Tax. Code § 11911(a)). That is $1.10 per $1,000, figured on value “exclusive of the value of any lien or encumbrance remaining thereon” (§ 11911(a)). The Act charges whoever signs the deed or the person it benefits (§ 11912). Your contract picks the payer. Cities stack far more: Los Angeles adds $2.25 per $500, plus 4% above $5,400,000 and 5.5% at $10,900,000 or more. San Francisco tops out at $30 per $500 at $25 million or more. Those are examples, not a full list. Ask your county recorder. Details: our California closing costs page.

What the seller must hand you

The Transfer Disclosure Statement is printed in the statute itself (Cal. Civ. Code § 1102.6), for homes with one to four dwelling units, plus condo, co-op and PUD units, and manufactured homes sold through a broker (Bus. & Prof. Code § 10018.08). The seller delivers it “as soon as practicable before transfer of title” (§ 1102.3). Section 1102.2 exempts twelve kinds of transfer, among them foreclosure and court-ordered sales. More: our California seller disclosure guide.

First-time buyer help: the CalHFA MyHome loan

The California Housing Finance Agency’s MyHome Assistance Program lends a junior loan, repayment deferred, topping out at the lesser of 3.5% of the purchase price or the appraised value when the first loan is a CalHFA FHA loan, and 3% with a CalHFA conventional loan, for “down payment and/or closing costs” (CalHFA MyHome page, read October 10, 2026). Conditions: first-time homebuyer; primary residence; no non-occupant co-borrowers; homebuyer education; CalHFA income limits. CalHFA “does not lend money directly to consumers.” More: first-time buyer programs in California and our down payment assistance guide.

Three California rules that shape your first year

The supplemental tax bill. A purchase is a change in ownership: the assessor reappraises at “full cash value” as of that date, and the gap over the old roll goes on a supplemental roll (Rev. & Tax. Code § 75.10). Close on or after January 1 but on or before May 31 and there are two supplemental assessments; close on or after June 1 and there is one (§ 75.11). Plan for that bill.

Late disclosures reopen your window. If a disclosure, or any material amendment, reaches you after your offer is signed, you have “three days after delivery in person, five days after delivery by deposit in the mail, or five days after delivery of an electronic record,” where the parties agreed to deal electronically, to terminate by written notice to the seller or the seller’s agent (Cal. Civ. Code § 1102.3). The clock starts when the seller’s — and the listing agent’s, if any — sections arrive completed.

The natural hazard statement. When the home sits in a FEMA special flood hazard area (Zone “A” or “V”), a dam-failure inundation zone, a very high fire hazard severity zone, a state-responsibility wildland area, an earthquake fault zone, or a seismic hazard zone, the seller delivers the Natural Hazard Disclosure statement (Cal. Civ. Code §§ 1103(c), 1103.2). The same termination right applies (§ 1103.3(c)).

Selling instead? See selling a house in California.

Paying your agent after August 17, 2024

NAR settlement practice changes since August 17, 2024 require a written buyer agreement before touring homes. Offers of compensation can no longer go on covered MLSs; a seller may still pay your agent off-MLS, and can still post concessions toward your closing costs on an MLS. “Compensation for your agent remains fully negotiable and is not set by law.” These are NAR rules, not California statute. Verify any license through the California Department of Real Estate’s Public License Lookup.

Questions California buyers ask

Who holds my money between the signed offer and the keys?

A licensed escrow company. Running escrows without a corporate escrow license is unlawful (Cal. Fin. Code § 17200).

Why did a second property tax bill arrive after I bought?

That is the supplemental assessment. It bills the part-year gap between the new base-year value and the old roll; a January 1–May 31 closing can bring two (Rev. & Tax. Code § 75.11).

The disclosures came after I signed. Can I still back out?

Yes, within three days of hand delivery or five of mailing or agreed electronic delivery, by written notice to the seller or the seller’s agent (Cal. Civ. Code § 1102.3).

Keep reading: California closing costs; California seller disclosure guide.