If this all sounds perfect and you\u2019re getting serious about purchasing a home in San Diego, read on.<\/p>\n\n\n\n\n\n
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\n <\/div>\n \n Looking to Buy Your Dream Home in San Diego?<\/h3>\n
If you’re shopping for a home in San Diego, a trusted buyer’s agent is a key member of your team. HomeLight analyzes millions of transactions and thousands of reviews to find you a proven, top-performing agent in just under two minutes.<\/p>\n \n
What will it cost to buy a home in San Diego?<\/h2>\n
According to data from the California Association of Realtors, the overall median single-family home price in San Diego was $824,950<\/a> in the first months of 2023. However, the median prices of homes in San Diego County vary widely when you look at them by home size<\/a>.<\/p>\n Those seeking to buy in some of the more sought-after areas might find themselves paying well over the $1 million mark for their dream home. And with so many options, determining which neighborhood is best, what you can afford, and how to go about the process can seem overwhelming.<\/p>\n With the help of top San Diego agent Woody Henderson<\/a>, who has 17 years of experience and specializes in relocations, we\u2019ve put together a comprehensive guide that breaks down all the ins and outs of buying a house in San Diego. With tips on everything from how to save for your down payment, specific loan programs for buyers, and what you should look for in an agent, we\u2019ve got you covered.<\/p>\n Let\u2019s dive into the steps of buying a house in San Diego:<\/p>\n Before you start looking for homes in San Diego, you want to determine if you\u2019re ready to purchase one. Consider factors such as how long you plan to be in the area, if you have steady employment, and if you have enough money saved for not just the down payment, but for closing costs<\/a>, maintenance, property taxes, and more. Closing costs in California average about 1% of the home\u2019s sale price<\/a>, and there are other pre-paid costs you might have as well.<\/p>\n During this time, review your credit score<\/a> and determine if it\u2019s considered excellent, good, fair, or poor. Typically, the higher your credit score, the lower your interest rate will be, which saves you money over the life of the loan. You may want to pay off any collections accounts, dispute errors on your credit report, and pay down your credit card balances before you start shopping for a home.<\/p>\n Henderson says that while connecting with a reputable agent who knows the San Diego market is important, one thing potential buyers should be sure to do is to align themselves with a great lender.<\/p>\n \u201cThe average real estate transaction has more than 40 different people involved and hundreds of pages of documentation,\u201d he says. \u201cIt\u2019s important, especially for first-time buyers, to have someone in both the real estate side and in the mortgage side of things who will represent you and help you navigate.\u201d<\/p>\n The median sold price in San Diego is around $825,000<\/a>. So, expect to spend somewhere around that number depending on what part of California you\u2019re purchasing in, the home\u2019s age and condition, and the size of the house and property, among other factors.<\/p>\n Different loan programs will require different down payment amounts, but you do not always need to put 20% down when buying a home. A survey completed by the National Association of Realtors found that first-time homebuyers put just 6% down<\/a> on average in 2022, and the overall average for repeat buyers last year was 17%<\/a>.<\/p>\n If this sounds daunting, don\u2019t worry. There are loan programs<\/a> that allow as little as 3.5% down, and Henderson says that for first-time buyers<\/a>, San Diego has a number of down payment assistance programs. \u201cThere are affordable housing programs, silent second mortgages that help cover the down payment, as well as others,\u201d he says. \u201cThey sometimes have stringent requirements, but they also provide tremendous value to new buyers.\u201d<\/p>\n Some of the down payment assistance programs in San Diego include the following:<\/p>\n San Diego County Down Payment Assistance\/SDHC<\/a>: First-time buyers with a home purchase price of $589,000 or less may qualify for San Diego County\u2019s down payment assistance program. Funded in partnership with the San Diego Housing Commission (SDHC), the program offers a deferred payment loan of up to 17% of the purchase price and up to $10,000 in closing costs assistance. Borrowers must meet specific income requirements and must contribute at least 3% of the purchase price. The program also has restrictions on the type of home and its location.<\/p>\n My Home California Down Payment Assistance<\/a>: California Housing Finance Agency (CalHFA), offers first-time homebuyers deferred payment loans through both FHA and conventional programs, to assist with down payment and\/or closing costs. Loans are between 3%-3.5% of the purchase price or appraised value, and borrowers must meet certain income limits, owner-occupy the property, and are required to complete homebuyer education counseling. CalHFA works through approved lenders, and buyers apply for the program through their loan officer.<\/p>\n San Diego Black Homebuyers Program<\/a>: Funded through The San Diego Foundation and the Local Initiatives Support Corporation (LISC), this grant program offers eligible African-American homebuyers up to $40,000 to use toward their down payment and\/or closing costs. Applicants must be first-time homebuyers, be residents of San Diego County, and are required to meet specific income limits. Their home must also be their primary residence.<\/p>\n Getting preapproved for a mortgage will help you determine how much you can afford, which will then inform your home search. It\u2019s always smart to shop around for the best rates and terms<\/a>, so be sure to research a few different lenders during this process.<\/p>\n You can also ask family, friends, your buyer\u2019s agent, and attorneys for mortgage lender recommendations. When choosing a mortgage lender, ask for a detailed cost breakdown, review the terms you are being offered, and compare loan types<\/a>.<\/p>\n According to the US Consumer Financial Protection Bureau (CFPB), there are three general categories of mortgage<\/a>:<\/p>\n Conventional loans<\/a>, the most popular type of mortgage loan, are loans that are not backed by the federal government. Under the conventional loan umbrella are two subcategories called \u201cconforming\u201d and \u201cnon-conforming.\u201d Conforming loans are given to buyers who fit into the qualification guidelines set by the entities Fannie Mae and Freddie Mac, who purchase loans after they are originated.<\/p>\n Non-conforming loans are for borrowers who do not fit into the guidelines set by Fannie and Freddie and are not eligible to be purchased by them \u2014 jumbo loans<\/a> are an example of this because they offer loan amounts above the limits set by Fannie and Freddie.<\/p>\n FHA loans are geared toward borrowers with lower income and have more lenient credit score and down payment requirements than conventional loans. These government-backed loans can be a great option for borrowers who meet the requirements, however, they do require mortgage insurance.<\/p>\n Similar to conventional conforming loans in this way, FHA loans have loan limits that vary from county to county. For example, in San Diego county, the maximum loan amount is $879,750 for a single-family home, while in nearby Riverside county, the loan limit is $562,350. Visit this link<\/a> on the U.S. Department of Housing and Urban Development (HUD) website to find the FHA loan limit in the county where you’re shopping for a home.<\/p>\n VA loans:<\/b> For veterans, service members, and surviving spouses. Loans backed by the VA<\/a> offer 0% down payments for those who qualify. Different lenders will have different requirements, however, VA-backed loans do not have a universal maximum DTI requirement.<\/p>\n USDA loans:<\/b> These loans are backed by the United States Department of Agriculture and are for lower-income borrowers in \u201crural areas.\u201d To determine if the area you are purchasing in is eligible for a USDA home loan, use this eligibility map<\/a>. These loans also offer 0% down for qualified borrowers.<\/p>\n Now that you know more about preparing to purchase a house and down payments, it\u2019s time to decide where you want to live. Do you want to live near family and friends, start over in a new neighborhood, live on the coast, or in a more rural area? Consider work commute times, average house prices, and things to do in each area that you\u2019re thinking about living in.<\/p>\n Some great places to consider when buying a house in San Diego include:<\/p>\n Mission Beach:<\/b> With its coastal location and many amenities, Mission Beach is a trendy neighborhood for young professionals. Being so close to the ocean means home prices run higher here, with a median of around $1.5 million<\/a>. The trade-off of having the beach almost at your back door might be worth it, however. This is also a popular location for homeowners who might want to purchase a home for vacation rentals, as there is a plethora of shopping, bars, and restaurants nearby.<\/p>\n Poway:<\/b> Ranked in the top 10<\/a> for best San Diego suburbs, the inland neighborhood of Poway is a great place for families. Schools here are highly rated, with Poway Unified School District coming in at #2 for best school districts<\/a> in San Diego. The median home price<\/a> here is around $1 million, slightly less than beachfront neighborhoods but with almost as many amenities as the pricier areas. Poway also has more of a rural feel. It\u2019s known for its peach production, vineyards, and farming.<\/p>\n Clairemont: <\/b>Located just a quick 15-minute drive from downtown San Diego, Clairemont is an up-and-coming neighborhood that is quickly becoming sought-after by both families and singles. It is divided into four sections \u2013 Clairemont Mesa East, Clairemont Mesa West, Bay Park, and Bay Ho. There are several large parks here, giving it a suburban feel, but you also aren\u2019t far from the beach and amenities of the city. Median home prices are between $900,000 and $1 million<\/a>, with some areas such as Mesa East<\/a>, running slightly less.<\/p>\n Carmel Valley: <\/b>Carmel Valley is an upscale suburb located about 20 miles northwest of the city, and is ranked #5<\/a> for best neighborhoods to live in San Diego. Home prices here average $1.5 million<\/a>, and the area is known for its highly-rated public schools, parks, and amenities. People who live here love the nearby beach access, restaurants, shopping, and being close to both San Diego and other neighborhoods like La Jolla and Del Mar.<\/p>\n Real estate agents almost always appreciate it when their clients come to them to start home shopping after getting preapproved for a mortgage. This typically means that a buyer is ready to go and can start making offers. Choose a knowledgeable agent<\/a> that specializes in representing buyers in the area you want to purchase in.<\/p>\n Your buyer\u2019s agent<\/a> will be able to help you create a wishlist<\/a>, set up viewing appointments for you, tell you more about what\u2019s going on in the neighborhood, negotiate on your behalf, and connect you with other vendors such as a title company, insurance agent, and home inspector. Real estate agents are also incredibly knowledgeable on the homebuying process as a whole and can hold your hand throughout the process to keep closing on track.<\/p>\n Once you\u2019re preapproved for your loan and line up a knowledgeable agent to work with, the fun part of the house-hunting process really begins. Depending on your budget and location preferences, San Diego home styles range from Victorian style, craftsman, mission, beach bungalows, and Mediterranean.<\/p>\n The San Diego real estate market tends to follow seasonal trends, with prices rising after the holidays and into the summer. According to data<\/a> collected from the National Association of Realtors, prices in San Diego are up from a year ago, but price growth is slowing.<\/p>\n When looking for a home, Henderson suggests really thinking about where you want to live and what\u2019s important to your lifestyle. \u201cSome people want to be close to work, their social circles, or their children\u2019s schools,\u201d he says. \u201cOthers may feel that sacrificing location for a less expensive house is worth the trade-off.\u201d<\/p>\n Working with your buyer\u2019s agent to craft a winning offer<\/a> can sound overwhelming. In competitive markets, cash offers could be more likely to be accepted by sellers with multiple interested buyers. While it is not always recommended to completely waive contingencies<\/a> to impress a seller, you might consider pairing down to just the inspection contingency and financing contingency to remain competitive. Get creative with your offer<\/a> \u2014 you may want to offer a larger earnest money deposit, schedule a quick closing, or even consider letting the seller rent the house back from you for a certain period of time.<\/p>\n Henderson says that, like much of the country, the market in San Diego has cooled slightly, and while buyers may still sometimes have to compete against multiple offers, there is more room for negotiation. \u201cI try to reach out to the listing agent during the pre-negotiation process and see what is important to the seller,\u201d he says. \u201cDo they need to do a rent-back on the house, or do they want a quick close? What is their timeline and what will make our offer stand out?\u201d<\/p>\n Components of an offer<\/a> when buying a house in San Diego include:<\/p>\n Your earnest money deposit<\/a>, also known as a \u201cgood faith deposit,\u201d is an amount of money you agree to pay the seller to indicate that you are serious about purchasing the home. This is usually between 1% and 3% of the purchase price. However, a higher deposit can be more attractive to sellers and make your offer stand out in competitive markets.<\/p>\n Whether or not you get your earnest deposit money back if you decide to back out of the sale depends on the contract. If you decide to back out of the purchase for any reason not specified in the contract, you could forfeit your earnest money. Be sure to review the contract with your real estate agent and attorney before making any decisions.<\/p>\n Ordering a title search can be done any time after your offer is accepted, but it\u2019s a good idea to do it as soon as possible because it may take a couple of weeks for the title search to come back, especially if the title company is backed up. Who customarily chooses the title company can vary by county \u2014 but if it is the buyer’s choice, your real estate agent or mortgage lender will likely have a recommendation.<\/p>\n The title company will issue a preliminary title report<\/a> that will be reviewed by all parties, including your lender, and will include items such as property tax information, easements, CC&Rs, deed restrictions, liens, and any judgments against the title of the home. Any liens, encumbrances, or judgments against the property will need to be removed before the buyer can close on the property. Henderson says that title issues in San Diego are fairly rare, but there may occasionally be tax levies that have to be cleared prior to closing.<\/p>\n Homeowners insurance is always recommended and it is almost always required if you\u2019re financing your home with a mortgage. The average yearly cost of homeowners insurance<\/a> in San Diego is $1,333.<\/p>\n While most areas in San Diego aren\u2019t going to require specialty hazard insurance, Henderson notes that some areas, especially those near the San Diego river, may be prone to flooding and flood insurance is recommended. He adds that some neighborhoods also fall into fire hazard zones. \u201cIf you want to buy a house that happens to be in a fire hazard zone, insurance can sometimes be a challenge,\u201d he says. \u201cYou can still get it, but it is going to be more expensive. This is where having an experienced agent will really help you, because we know which areas may require additional insurance.\u201d<\/p>\n If you\u2019re applying for a mortgage, your lender will most likely order the appraisal<\/a>, and you will pay for it. You will be responsible for ordering your own inspections with the help of your buyer\u2019s agent, again, at your own cost. Your agent can recommend a licensed home inspection company if you don\u2019t have one. The home inspector<\/a> will schedule a date and time to inspect the house and, depending on its size, it may take a couple of hours to complete.<\/p>\n Some common issues in homes in San Diego that might merit a separate inspection include:<\/p>\n Air conditioning\/HVAC:<\/b> Most homes in San Diego have air conditioning, and because they can be quite pricey to replace, getting a separate inspection might be a good idea. The home inspector will look at the unit and will be able to note anything questionable, but if you\u2019re concerned about it, or if the unit in the home you\u2019re purchasing is older, it\u2019s worth it to get a separate inspection.<\/p>\n Pool and spa: <\/b>If you\u2019re buying a house with a pool and\/or spa, it\u2019s important to have a pool inspection done by a professional pool inspector. Most general home inspectors will do a visual inspection of the pool, but only to determine if further inspection is needed by a specialist. Pools can sometimes have significant repair issues, especially if the previous owners didn\u2019t keep up with maintenance, so it\u2019s definitely of value for buyers to get a full pool inspection.<\/p>\n\n
Steps to buying a home in San Diego<\/h2>\n
1. Assess your readiness<\/h3>\n
2. Saving for your down payment<\/h3>\n
3. Get preapproved for a mortgage<\/h3>\n
Conventional<\/h4>\n
FHA loans<\/h4>\n
Special programs<\/h4>\n
4. Research the market and determine where you would like to buy<\/h3>\n
5. Find a local San Diego agent<\/h3>\n
6. Start shopping for homes in San Diego<\/h3>\n
7. Make a strong offer<\/h3>\n
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8. Send your earnest money deposit<\/h3>\n
9. Order a title search<\/h3>\n
10. Shop for homeowners and specialty hazard insurance<\/h3>\n
11. Order inspections and appraisal<\/h3>\n
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While we don\u2019t really recommend asking for repairs of cosmetic issues, we always suggest negotiating health and safety issues. Things come up, and sellers need to be prepared to take care of issues that arise.<\/q>\n
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