The process of buying a home may seem daunting, but it doesn’t have to be. Home buyers in California will find that their real estate market is unique and full of surprises. But the access to city life, beaches, and mountains make it an ideal spot for many people. Here are some important things to know about buying a home in the Golden State:
1. It is Expensive
It is more expensive to buy a home in California than in any other state. While California is known as one of the most beautiful places in the country, it is also one of the most expensive states in which to live. You’ll need to make sure that you have the income to support your mortgage. Fortunately, living in California means that there are still great job prospects, so buying a home is often a much better investment than renting. The high rental rates certainly overshadow what a mortgage would cost.
2. Supply and Demand Drive High Home Prices
Home prices are higher in California for two main reasons – supply and demand. Fortunately, if you’re looking at SoCal, there are still Irvine homes for sale and you can even find homes in nearby Tustin or Santa Ana. These locations give you easy access to the big city but can be a little less expensive than living right in the heart of LA.
The demand for homes is still higher than the supply, so it’s best to go into the market ready to make an offer and buy quickly to ensure you can get the home you need when it’s available. You’ll need to ensure that your home has been built using California’s strict building standards that help homes resist damage from earthquakes.
3. There are More Affordable Homes in Some Places
There are big price differences between homes throughout the state. You should also be aware that prices vary by city, county, and neighborhood. Homes are more expensive on the coast because there’s such high demand for them from people who want to live near the ocean and spend their weekends hiking or surfing at one of California’s many beaches.
Rural areas tend to be less expensive although they have fewer amenities and services and may not have as many job opportunities. However, these areas are a great option for those who work remotely or own a business and want to experience all that California has to offer, but at a much more affordable price.
4. Come to the Offer Table With Money
You will probably need a 20% down payment when you buy a home in California. Although there are some programs that allow for a 5% down payment, not everyone qualifies for those programs. Plus, when sellers have multiple offers on the table, they are more likely to take the one that has more cash upfront because the sale is more likely to go through in a quick and timely manner.
5. You May Qualify for Tax Exemptions
There are several property tax exemptions available for some homeowners in California. If you’re a veteran, senior or disabled homeowner in California and meet certain income requirements, you may qualify for a property tax exemption. To apply for a property tax exemption, fill out the appropriate form with your county assessor’s office. In general, the Veterans’ Property Tax Exemption applies only to veterans who have served in active military service during wartime; it does not apply to National Guard members or Reservists. The Senior Citizen Exemption applies only to homeowners who are 65 years or older on January 1 of each year and meet other income requirements.
6. Don’t Forget to Factor in HOA Fees
You might have to pay an HOA fee if you purchase a condo or townhouse or home in a master-planned community. Homeowners Association (HOA) fees are monthly or annual fees that cover the cost of maintaining your community. These costs include landscaping, trash collection, and other services in your area. The amount of this fee varies depending on where you live, as well as other factors such as whether utilities are included in the price of your home. Some HOA fees are as low as $50 a month, while others can be as high as $500 or more. These monthly fees are necessary to maintain community activities.