Steps 1-4: Offer Through Inspection

Step 1: Pre-approval with jumbo lender. Most desirable California markets require loans above the conforming limit ($806,500 in standard counties; up to $1,209,750 in designated high-cost counties like Los Angeles, Orange, San Diego, San Francisco, Santa Clara, and others). Identify whether you need conforming, high-balance conforming, or jumbo financing before shopping. Many buyers in the Bay Area, coastal Southern California, and wine country will need true jumbo financing. Step 2: Buyer Representation Agreement. Required post-August 2024 NAR settlement. California uses CAR (California Association of Realtors) standard forms. Step 3: Making an offer on the CAR RPA. The California Residential Purchase Agreement (CAR RPA) is the standard contract. Key terms: purchase price, down payment, contingency periods (inspection 17 days, loan 21 days, appraisal within loan contingency), escrow period (30–45 days typical), included items (appliances, fixtures). Step 4: Inspection contingency (17 days). California's standard inspection contingency period is 17 calendar days. During this period, the buyer can cancel for any reason and recover the earnest money (typically 1–3% of purchase price in California). In competitive markets, buyers sometimes shorten or waive contingencies to strengthen offers.

The Natural Hazard Disclosure (NHD)

California law requires sellers to provide a Natural Hazard Disclosure (NHD) report to buyers, typically within 7 days of acceptance. This is one of the most comprehensive hazard disclosures in any state. The NHD discloses whether the property is in: • Seismic Hazard Zone: liquefaction risk area • Earthquake Fault Zone: within 50 feet of a known active fault (Alquist-Priolo zones) • Special Flood Hazard Area: FEMA flood zones A and V • Dam Inundation Area: risk of flooding if an upstream dam fails • Very High Fire Hazard Severity Zone (VHFHSZ): state-designated high fire risk area • State Responsibility Area (SRA): Cal Fire jurisdiction for fire suppression • High Fire Hazard Severity Zone: locally designated Properties in Very High Fire Hazard Severity Zones face the most severe insurance challenges in California's current market. Review the NHD carefully — particularly the fire hazard designations.

The Escrow Process: California's Closing Mechanism

California uses escrow companies (title companies with escrow divisions) to manage closings. No attorney is required or customary. How California escrow works: 1. Both parties execute the purchase agreement 2. Buyer delivers earnest money deposit to escrow 3. Escrow holder opens escrow, orders title search and title insurance 4. Lender sends closing instructions to escrow 5. Escrow prepares closing documents (grant deed, deed of trust, HUD-1/Closing Disclosure) 6. Parties sign documents (often remotely or separately; California "split escrow" is common) 7. Buyer wires remaining funds; lender funds the loan 8. Escrow records the deed with the county 9. Funds disbursed; keys released California closing timelines are typically 30–45 days for purchase transactions. Most counties record the same day funds are received; some record next business day.

“California is escrow-driven, which means the escrow officer — not an attorney — is the central coordinator. The system works extremely well when everyone is communicating proactively. The most common California closing delay: lender document delivery. Escrow cannot close until lender docs arrive, and lender docs that arrive late in the day may push recording to the next business day. I advise every California buyer to plan for funding no later than 10 AM on the scheduled close date to give maximum runway.”

— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®

• CA Homebuying Guide (Hub)
• Proposition 13 Explained
• CA Closing Costs
• CA First-Time Buyer Programs
• CA Property Taxes
• CA Insurance Crisis
• Best CA Markets

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