How Much Does It Cost to Buy a House in California?

If you're in the market to buy a home, remember that it's going to cost more than just the down payment to close the deal. In California, the median home value is $769,405. The average home buyer would need to spend between $56,729 and $206,212 to close on a home in that price range, depending on down payment size and location.

Don't forget paying all the upfront costs included in your home purchase is only the beginning. Once you close, you'll need to begin paying for the ongoing costs of homeownership like your mortgage, utilities, and taxes. Fortunately, Clever Real Estate can help you get started off on the right foot. By working with a Clever agent, you'll get top-notch service and may be eligible for up to 0.5% cash back after closing — that's about $3,847 on an average priced home in California.

Don't forget paying all the upfront costs included in your home purchase is only the beginning. Once you close, you'll need to begin paying for the ongoing costs of homeownership like your mortgage, utilities, and taxes.

Fortunately, Clever Real Estate can help you get started off on the right foot. By working with a Clever agent, you'll get top-notch service and may be eligible for up to 0.5% cash back after closing — that's about $3,847 on an average priced home in California.

Average cost to buy a house in California

Although there tends to be a lot of overlap in home buying costs between states, there are also items specific to California that you want to prepare for. Below is a list of the most common expenses you should expect to pay:

Since California has one of the highest average home values in the nation, your total cost to buy a house is likely to be more expensive than other states.

Specific California closing costs

The average closing costs for a buyer in California tend to be about $13,491, but remember that this varies widely depending on your area. The average closing costs in Los Angeles, for example, will probably cost you more than Oxnard.

Escrow fees are one example of regional differences in how California handles closing costs. In the north, only title insurance companies handle escrow. In the south, separate title and escrow companies are used by both the buyer and seller. In both areas, however, the buyer and seller usually split the closing costs 50/50.

Transfer taxes are another expense to keep an eye on. The state tax rate is $1.10 per $1,000 of home value, but you could also get hit with city and county transfer taxes as well. Oakland, for example, has some of the highest transfer taxes in the nation at 1–2.5%, depending on the sale price.

As a silver lining, California caps property taxes at one percent of the assessed value of a home when it is purchased. So, even though you will need to pay prorated taxes for the remainder of the year after your closing date, it will at least be lower than you would expect for most other states.

Average cost to buy a house in major California cities

As you might expect, the cost to buy a house in some parts of California are substantially higher or lower than others.

In California, some of the most popular places to buy a house include: Los Angeles, Sacramento, San Diego, San Francisco, and San Jose. Below are the average home prices and cost to buy a home in each city:

How much do I need to buy a house in California?

The amount of cash you need to buy a house in California is determined mostly by the size of your down payment and the price of your home. The table below shows some estimates of how much money you need at various price points and common down payment percentages.

Ongoing costs of homeownership in California

Many buyers get so wrapped up in whether they can afford to buy a house or not, they forget to ask if they can afford to keep it.

Besides your mortgage payment, you also need to account for taxes, insurance, maintenance, repairs, and possibly upgrades. There can be quite a range for most of those expenses, but most experts recommend earmarking one percent of your home's value for maintenance and repairs.

Another expense to consider is homeowner's association (HOA) fees. The majority of homeowners in California actually belong to an HOA of some kind, so there's a decent chance you'll need to budget for this as well.

The national average for HOA fees is about $250 per month, but this can vary significantly depending on your neighborhood and city.

Also, if your down payment is less than 20%, your lender may require you to pay for private mortgage insurance (PMI). This will be added to your monthly mortgage payment and typically costs $335 to $1,133 per month until you've accrued enough equity.

Top ways to save money when buying a house in California

There's no getting around the fact that buying a house is going to cost you some money. But there are some useful strategies for minimizing the cost and keeping some of that money in your pocket.

Look into better financing options

Since your mortgage payment makes up the majority of your monthly homeownership cost in most cases, a great way to bring this down is to get a lower interest rate.

The average homeowner in California pays 5.42% on a 30-year, fixed rate mortgage. The lower your interest rate, the more money you can save over the life of your loan.

Making sure your credit score is top notch and shopping around for a great lender are some of the best ways to ensure you get the best rate available to you.