Start with today's prices
The Bay Area is still the most expensive housing market in California. According to the California Association of real estate agents' third-quarter 2026 affordability report, the median price of a single-family home was about $2.27 million in San Mateo County, $2 million in San Francisco, and $1.92 million in Santa Clara County. Condos and townhomes usually cost less, which is why many first-time buyers start there.To keep the math simple, the examples below use a $1.5 million home.1. Down payment
The classic target is 20%, which on a $1.5 million home is $300,000. Putting 20% down avoids private mortgage insurance and makes your offer stronger, but it is not the only option. Some conventional loans allow much smaller down payments. Jumbo loans, which many Bay Area purchases need, often require 10% to 20% down.The loan size matters here. For 2026, the conforming loan limit in San Francisco and other high-cost Bay Area counties is $1,249,125 for a single-family home. A loan at or below that amount usually has more flexible terms than a jumbo loan. With 20% down on a $1.5 million home, your loan would be $1.2 million, just under the limit.2. Earnest money deposit
When your offer is accepted, you put down a good-faith deposit into escrow, usually within a few days. In California this is often around 3% of the price, so about $45,000 on our example. It is credited toward your down payment at closing, but you need the cash ready early in the process.3. Closing costs
Plan for buyer closing costs of roughly 1% to 2% of the price, or about $15,000 to $30,000 on a $1.5 million home. This covers lender fees, the appraisal, title insurance, escrow fees, and prepaid items such as property taxes, homeowners insurance, and interest. Paying points to lower your rate will add to this number. Transfer taxes are commonly paid by the seller in many Bay Area markets, but customs vary by city and everything is negotiable, so ask your agent how it works where you are buying.4. Inspections
Many Bay Area sellers provide inspection reports before listing, but I still encourage buyers to read them carefully and, when needed, order their own. Depending on the home, that can include a general home inspection, a pest inspection, a sewer lateral camera inspection, and a roof or foundation inspection. Each one typically costs a few hundred dollars to around a thousand.This is where my background helps. Before becoming an agent, I spent five years as a construction superintendent on residential and commercial projects. Many homes on the Peninsula and in San Francisco are 60 to 100 years old, and the repairs that hurt buyers most are usually hidden: old drain lines, foundation settling, outdated electrical, and water damage behind walls. A few hundred dollars spent on the right inspection can save you tens of thousands later.5. Cash reserves
Lenders want to see that you will still have savings after closing. For jumbo loans, it is common to need several months of mortgage payments in reserve, and sometimes more. Even if your lender does not require it, I recommend keeping a cushion for the first year of ownership.6. Your monthly payment
Using the $1.2 million loan from our example at a 6.8% 30-year fixed rate (the average rate C.A.R. used for the third quarter of 2026), principal and interest come to about $7,800 a month. Add property taxes and insurance and you are looking at roughly $9,500 a month before any HOA dues. Your actual rate will depend on your credit, loan type, and the market when you lock.A few costs first-time buyers often miss:- **Property taxes:** In California, the base rate is 1% of your purchase price, plus local bonds and assessments, which usually brings the total to about 1.1% to 1.3% a year. You may also receive a supplemental tax bill after you buy.
- **HOA dues:** Condos and townhomes have monthly HOA dues. Ask for the budget and reserve study so you are not surprised by a special assessment.
- **Mello-Roos:** Some newer communities have special tax districts that add to your annual tax bill.
- **Insurance:** Homeowners insurance has become harder to get in parts of California, and earthquake coverage is separate. Get quotes early, before you remove contingencies.
Putting it together
For a $1.5 million home with 20% down, a realistic cash budget looks like this:- Down payment: $300,000 (your earnest money deposit counts toward this)
- Closing costs: $15,000 to $30,000
- Inspections and appraisal: about $1,500 to $3,000
- Reserves and moving: several months of payments, plus moving costs and first repairs