Buying a Home in Los Angeles: the Full Process

1. Get pre-approved before you tour

A pre-qualification is a quick estimate of what you might borrow; a pre-approval means the lender has actually verified your finances and states how much it will likely lend. They are not interchangeable — in competitive San Gabriel Valley markets, sellers usually expect a pre-approval letter (or proof of funds if you're paying cash) attached to your offer before they take it seriously.

Since the 2024 NAR settlement, you'll also sign a written buyer-representation agreement before touring homes. It states your agent's fee in writing, and commissions are fully negotiable — the fee may be paid by you, credited by the seller, or negotiated inside the offer itself.

2. The offer and your three safety nets

California offers are usually written on the C.A.R. purchase agreement and typically include three contingencies — inspection, appraisal, and loan — each with a negotiable timeline. In hot markets these are commonly compressed to 17 days or shorter. A contingency is your right to cancel and keep your deposit if that item fails.

The good-faith (earnest money) deposit in Southern California commonly runs around 1–3% of the price. It sits in escrow and is credited back to you at closing. Cancel within your contingency periods and you generally get it back; remove contingencies first and it may be at risk as liquidated damages — so time the removals carefully.

3. Escrow: the 30–45 day middle game

California purchases close through a neutral escrow — typically 30–45 days for financed deals. During this window your deposit is held by the escrow company while inspections, loan approval, title work, and final signing all happen in parallel. Only when every condition is met do the funds and the deed change hands.

A general home inspection in LA typically costs a few hundred dollars and covers structure, roof, plumbing, and electrical. For older San Gabriel Valley homes, sewer-line and termite (wood-destroying pest) inspections are common add-ons worth budgeting for.

Title insurance protects you against ownership defects — liens, forgeries, recording errors. In a typical California deal the buyer receives an owner's policy and the lender requires its own; who pays which premium is negotiable and varies by county custom.

4. What closing actually costs

Buyer closing costs usually run about 2–5% of the purchase price, covering lender fees, escrow and title fees, and prepaid taxes and insurance. Two documents keep this honest: lenders must give you a Loan Estimate within 3 business days of your application, and a Closing Disclosure 3 days before signing — compare them line by line.

SOURCES

• CFPB — pre-approval
• NAR — facts.realtor — agent commissions (post-2024)
• California Assoc. of REALTORS® — offers & contingencies
• CA Dept. of Real Estate — escrow process
• CFPB — earnest money deposit
• ASHI — home inspection
• CA Dept. of Insurance — title insurance
• CFPB — closing costs

General information only — not legal, tax, or lending advice. Rules change; verify with official sources and licensed professionals. Updated 2026-07-09.

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