Buying a home
How to Buy a Home in the Bay Area
The seven steps of buying a Bay Area home, explained plainly. What a list price is really telling you, what you sign, what escrow does, and where buyers lose offers.
Step 1: Work out what you can actually afford
There are two different numbers here and confusing them is the most common early mistake.
The first is what a lender will approve you for. The second is what you can carry without resenting the house. They are rarely the same, and the gap is often large. A lender is calculating a ratio. They are not accounting for the fact that you would like to keep travelling, or that childcare is about to start.
So the first conversation is about the second number. Monthly payment including taxes and insurance, HOA dues if it is a condo, and what you want left over at the end of the month. Then we work backwards to a purchase price.
Get pre-approved before you look at houses, not after you find one. In a competitive Bay Area situation a pre-approval is the difference between an offer that gets read and one that does not. If you need a lender, I will introduce you to people I have actually closed with.
What you need to have ready
- A pre-approval letter from a lender, not a pre-qualification
- Your down payment funds identified and documented
- A monthly number you are genuinely comfortable with
- An honest sense of your timeline, including any lease or job start date
Step 2: Decide who is working for you, and put it in writing
Before I show you homes, we sign a California Buyer Representation Agreement. That is the written agreement that makes me your agent rather than someone you happen to be walking through houses with.
It sets out what I do for you, how long the arrangement runs, and how I am compensated. Compensation is negotiable and it is set between us in that agreement. It is not fixed, and no rule, association or custom sets it. Anyone who tells you otherwise is wrong.
Read it before you sign it and ask me about anything in it that is unclear. That is what the document is for. If you would rather go through it in Russian, we go through it in Russian.
Worth understanding: the listing agent works for the seller. In an open house, the friendly person answering your questions has a legal duty to someone else. That is not a criticism of them. It is just how representation works, and it is why having your own agent matters more than most first-time buyers realise.
How to Buy a Home in the Bay Area
Step 3: Search, and learn to read a list price
Here is the thing nobody explains properly, and it is the single most useful thing on this page.
In the Bay Area, a list price is frequently a strategy rather than a statement of value. Some listings are deliberately priced under market to manufacture competition and drive the price up through multiple offers. Others are aspirational and sitting far above what the house will actually sell for. Two homes that look almost identical online can have completely different outcomes.
If you take list prices at face value, one of two things happens. You overpay on the aspirational one, or you never even look at the underpriced one because you assumed the final number would be out of reach.
So on anything you are seriously considering, I pull what actually sold nearby and tell you what I think this one really trades at. Sometimes that means telling you the list price is fantasy. Sometimes it means telling you to expect to go well over it.
The other thing that takes time to learn here is that the Bay Area is not one market. It is a collection of micro-markets that behave very differently. The street matters, the school boundary matters, the block matters, and how the house shows in person matters. None of that is visible from a search app.
I will also tell you when a house is wrong for you, even when it costs me the deal. That is not a sales position. It is the only way this works long term.
Step 4: Write an offer that gets taken seriously
An offer is a price attached to terms, and in a competitive situation the terms often matter more than the final number on the price.
What goes into the decision:
- Price, informed by what actually sold nearby, not by the list price
- Earnest money. In my transactions this is typically around 3% of the purchase price, and it is held by escrow, not by the seller. It is your money, applied to your purchase, and it demonstrates you are serious.
- Contingencies. These are your exits: inspection, appraisal, loan. The length of each is negotiated in the purchase agreement. Shortening them makes your offer stronger and increases your risk, and I will not let you shorten one without understanding exactly what you are giving up.
- Closing date, matched to the seller's situation where possible. This is free leverage and it gets ignored constantly.
Before you write, I will have read the disclosure package and told you what is in it in plain language. Buyers lose offers by being slow, and they lose money by being fast. Reading the package early is how you get to be quick without being reckless.
If you have lost offers before with another agent, tell me. Usually there is a pattern in it, and the pattern is fixable.
Step 5: Inspections and disclosures, translated
Once your offer is accepted you are in contract and the contingency clock starts. This is the window where you verify what you have agreed to buy.
California sellers have extensive disclosure obligations, so on most transactions you will receive a substantial package: the seller's disclosures, natural hazard reports, and often inspection reports the seller commissioned before listing. It runs to hundreds of pages and it is written to protect the people who produced it.
My job is to translate it. What is normal for a house of this age. What is a real problem. What is expensive and what merely sounds expensive. A fifty year old building with wall furnace heat and no central air is not a defect, it is a building of that age. A foundation note is different.
You will hear me say this is actually very typical, and you will hear me say this part I don't love. Both are useful, and you should push back on either one.
You can also order your own inspections during this window, and for most purchases you should. If something material turns up, we decide together whether to ask for a credit, ask for a repair, or walk. Walking is a real option and I will say so when it is the right one.
Step 6: Financing and appraisal
While inspections are running, your lender is underwriting. They will ask for documents you have already sent them. Send them again anyway. Arguing with underwriting costs days you do not have.
The appraisal happens in this window too. The lender orders it to confirm the house supports the loan. In a competitive market where you have gone over asking, an appraisal can come in below the contract price, which creates a gap between what the house is worth on paper and what you agreed to pay. That gap has to be covered, renegotiated, or it ends the deal.
This is not a rare event here and it should not be a surprise. We talk about it before you write an offer over asking, not after.
Two practical rules for this stretch. Do not open new credit, and do not change jobs, without telling your lender first. Both can undo an approval late enough to cost you the house.
Step 7: Closing
California closes through escrow and title rather than through an attorney sitting at a table. Escrow is a neutral third party holding the money and the documents, making sure neither side has to trust the other.
Near the end you will sign your loan documents, usually with a mobile notary who comes to you, and you will wire your remaining funds to escrow.
One warning worth taking seriously. Wire fraud in real estate is real and it is common. Criminals send convincing emails with changed wiring instructions at exactly this moment. Before you send any money, call escrow at a number you already have and confirm the instructions by voice. Never trust wiring details that arrive by email alone, including from me.
Before closing we do a final walkthrough to confirm the house is in the condition you agreed to buy. Then the deed records, and the house is yours.
After that I am still the person to call. Contractors, questions, what it is worth in five years. That does not stop at closing.
Where to start
If you are early, that is the best time to talk. The buyers who do well here are the ones who understood the process before they needed it.
The first conversation is free and there is no pressure attached to it. Call or text (415) 305-6708, or email kate@cryptonrealty.com. You can do all of it in English or Russian.
This describes my general process for helping someone buy a home in California. It is not legal, tax or lending advice, and your situation may need something different.
Frequently Asked Questions
How much earnest money do I need in the Bay Area?
In my transactions it is typically around 3% of the purchase price, held by escrow rather than by the seller. It is your money and it is applied to your purchase. The exact amount is negotiated in the offer.
Do I need an attorney to buy a house in California?
California closes through escrow and title rather than through an attorney, so one is not required for a standard purchase. You may still want your own attorney for an unusual situation, and for legal questions you should have one.
Why do homes here sell for so much over asking?
Often because the list price was a strategy rather than a value. Some listings are deliberately priced under market to create competition. That is why I tell you what a house is likely to actually trade at before you write, instead of anchoring on the list price.
What do I sign before you show me homes?
A California Buyer Representation Agreement. It sets out what I do for you, how long it runs, and how I am compensated. Compensation is negotiable and agreed between us. Nothing about it is standard or fixed.
I keep losing offers. What am I doing wrong?
Usually there is a pattern, and usually it is fixable. It is often terms rather than price: contingency length, deposit size, closing date, or how the lender is presented. Bring me the offers you lost and we will find it.
Do you work with buyers in Russian?
Yes. I work in English and Russian, and closely with Ukrainian and Belarusian speaking clients. Contracts and disclosures can be walked through in Russian.
What happens if the appraisal comes in low?
There is a gap between the appraised value and what you agreed to pay, and it has to be covered, renegotiated or the deal ends. In a market where offers go over asking this is not rare, so we plan for it before you write, not after.
Keep exploring
Ready to make your move with Kate Fomina?