Overview of the Buying Process
Thinking about Buying Property in San Francisco?
Buying a home or investment property is one of the biggest financial decisions you will make. San Francisco is a unique market, so it’s a good idea to get ready as you start this process. Here are is an outline of the steps you’ll need to take before looking for property:
- Determine how much you can afford
- Get pre-approved for a loan
- Create your “dream home” list
- Find an agent whose style and experience matches your needs
- Start looking at property
Determine how much you can afford
First, determine how much you can afford by consulting with a direct lender or mortgage broker. A good lender or broker can estimate your monthly and annual costs, including insurance and property taxes, as well as your probable tax savings, to figure out how big a mortgage you can handle.
Get pre-approved for a loan
When you talk with your mortgage broker or lender, he or she will carefully consider your assets, debt, and income to calculate the exact amount that a bank will loan you to purchase your new home. At this point it’s also important to consider the various types of loans available and the right type for your financial situation. Given San Francisco’s tight housing market, it’s essential to be pre-approved for a loan before a seller will consider your offer on a property.
Create your “dream home” list
No property is going to have everything you want, but you should know upfront if there are things you absolutely must have (like parking), or things that would merely be nice to have (like a nearby café). Brainstorm the list of attributes you’ve dreamed about for your prospective new property (such as the number of bedrooms and bathrooms, proximity to transportation, etc), then label them “must have,” and “nice to have but don’t need.” Armed with this list, you won’t waste time looking at property that is lacking your “must haves,” or overbidding on properties loaded with lots of “nice to haves.”
Find a real estate agent
Now you’re ready to “shop” for a realtor whose experience and style is a match for your needs. You’ll want someone with a proven track record and knowledge of where property values are going in the City. You should also look for an agent whose expertise matches your perspective; someone who has helped clients with a similar financial profile to yours or who has worked in neighborhoods where you are particularly focused. San Francisco is a tricky market and a savvy agent is essential to closing on the property that is right for you. If you’re looking for a home in San Francisco, I’d love to talk with you. The best way to contact me is via email, or on my cell phone: (415) 819-2663.
Start looking at property
You’ve heard of Pacific Heights and Noe Valley, but what about Balboa Terrace or Forest Hills Extension? San Francisco is a city of neighborhoods, so use this map to start looking at areas both familiar and new:
Find a property and make an offer
Once you have visited enough properties with your agent to learn about the market at your price range, you may be ready to write an offer for the right property. The offer is just the beginning of the whole process of purchasing a property. Remember that there are some costs for buyers involved with the closing process so be sure to include these in your budget.
Types of Properties
Tenacy in Common: TIC
TIC’s are an affordable way for homebuyers to get into the San Francisco market.
For more information: TIC Q&A (PDF)
Condos are individual properties within a multiple unit building. Condos have a set of rules and regulations that are determined by all of the owners in the building, and most have a home ownership association fee (HOA) that ranges from $250-$375 per month.
Single Family Home
Single family homes, or residences (SFR) are generally priced higher than condos or TICs. Single family homes in San Francisco may not always be bigger or better than condos or TIC’s, but they are still very desirable.