San Clemente Housing Terms, Explained

Money and loans

Earnest money deposit

Money the buyer puts into escrow after an offer is accepted to show they mean it. It is not an extra cost, because it is credited at closing; whether it can be lost depends on the contingencies and deadlines in the contract.

Appraisal

The lender wants to know the home is worth at least what it is lending against, so it orders an appraisal. If the value falls short of the price, the parties can renegotiate, the buyer can bring more cash, or the deal can end.

Pre-approval

A lender’s written assessment, after reviewing your income, assets and credit, of the loan amount you may qualify for. It is stronger than a pre-qualification, which is a quick estimate, and it shows sellers that your offer is serious.

Closing costs

The fees due at closing on top of the down payment: loan charges, title and escrow fees, recording fees, and prepaid taxes and insurance. The Loan Estimate and the Closing Disclosure list them line by line.

Base-year value (Proposition 13)

The taxable value California sets when a property is purchased or newly built, usually the purchase price. Under Proposition 13 it can rise by no more than 2% a year until the next change of ownership. The base tax is about 1% of it, plus voter-approved local charges.
Local example: For a typical ZIP 92672 home at $1,747,711, the 1% base tax would be about $17,477 a year, or roughly $20,099 with an assumed 0.15% for voter-approved charges. Real bills vary by address and by any special taxes.

Proposition 19

Proposition 19 (2020) lets homeowners who are 55 or older, severely disabled, or victims of a wildfire or other disaster carry their taxable value to a replacement home in California, and it narrowed the parent-child exclusion for family transfers.

Supplemental tax bill

Watch for supplemental tax bills in the months after closing. They reflect the new, higher value from the date of the sale and arrive separately, so set the money aside.

The property and the neighborhood

HOA and CC&Rs

An HOA is the organization that maintains a community’s shared spaces and enforces its rules. Members pay regular dues, and the association’s governing documents, called CC&Rs, can limit rentals, pets, parking and exterior changes.
Local example: Many San Clemente communities and condominium buildings have associations; ask for the rules and the budget early.

Coastal zone and coastal development permits

In the coastal zone, a project may need a coastal development permit in addition to the usual building permit, issued by the city under its certified Local Coastal Program or by the Coastal Commission.
Local example: San Clemente’s Planning Division administers coastal planning; ask whether the address is in the coastal zone.

A note on what this is

These definitions describe general California practice in plain English. Contracts, forms and rules change and differ by case, so confirm details with your lender, the escrow officer, the county and a licensed advisor. Rudy Flores is a licensed real estate agent (CalDRE #02257808) with Coldwell Banker West, not an attorney or tax professional. Market numbers come from Zillow Research and Freddie Mac and are dated on the page.