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Justin Fichelson of ‘Million Dollar Listing’ Offers Tips for San Francisco Homebuyers

Finding the Right Mortgage, Home Search, Mortgage Process, Mortgages
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Justin Fichelson is a star of Bravo’s “Million Dollar Listing San Francisco” and a top real estate agent in the city. In a place that’s seen an influx of out-of-state transplants, he has a big advantage: He’s a San Francisco native. Born and raised in a Victorian house in Duboce Triangle, he has a deep understanding of the city and how best to go about buying real estate in one of the most distinctive urban areas in the U.S.

We brought him into our NerdWallet studio to share some tips for buying a home in San Francisco. Here’s what he had to say.

Get preapproved for a mortgage loan

One piece of advice Fichelson has, particularly for first-time homebuyers: “Get preapproved before you start the home search process, so when you find the perfect property, you’re ready to jump right into it.”  

For preapproval, a lender will assess your financial history before you even apply for a mortgage loan. The lender will preapprove you if your history is clean, which will make it that much easier to get a loan quickly when you need it.

Make sure your agent is knowledgeable

Finding the right property means having the right agent. This could be a real estate agent — someone who works for a company and has access to properties through that firm — or a buyer’s agent — a person who works for a company that’s unaffiliated with any particular seller and so isn’t constrained by a certain selection of listings.

The right agent, Fichelson says, is someone who can make your life easier. “You don’t want someone who’s going to be finding you what you could find on your own,” he says. “You want someone who has access to off-market listings through companies, through knowing other agents.

“This is someone who’s seeing 30 properties a week, who’s going to all the open houses, who’s going to Tuesday tours. They know the inventory, they know what’s coming up in the inventory, because they’re out there.”

Think small but exclusive

There’s no cheap way to buy property in San Francisco. When asked what he would do with $1 million to invest in property, Fichelson was pragmatic.

“If you’re in that price range, it’s not enough to afford a really nice house in San Francisco,” he says. “I’d recommend buying a junior one bedroom, or even a studio, in a premier cachet building. Somebody is always going to want a pied-à-terre, and a cachet building in a good location is always going to get high rent and be very salable.”

If all else fails, there’s one important feature your property should have: “Does it have parking, or does it have potential to easily add a garage?”

It’s all about the neighborhood

In a city as packed as San Francisco, where should an aspiring property owner look to buy?

“You’re looking for neighborhoods that are centrally located, with good weather, easy freeway access to Silicon Valley, and a lot of restaurants and bars,” Fichelson says. Even if you don’t have the cash to buy somewhere like the Mission, he says there may be hope in other neighborhoods.

“Ocean Beach or the Outer Richmond have certainly changed in the last couple years,” he says. They’re “cheaper and … right on top of the beach.” If you’re willing to wait 15 to 20 years for a big return on your investment, Fichelson says to keep on the lookout for properties in the Tenderloin, Mid-Market and Hunters Point.

The market will get only hotter

Rent is up, housing is scarce, and buyers are wondering whether San Francisco housing is in a bubble. In March, San Francisco home prices fell 1.8%, their first year-over-year drop in four years, according to a report from Redfin. What does this mean for the city’s real estate?

“I think that we’re in a normal correction across the country,” Fichelson says. “This includes the larger markets like L.A., New York and San Francisco. It’s just normal, healthy correction.”

In the long run, he says, “I see the real estate market here just getting hotter and hotter.”

Get more information on mortgages and finding a real estate agent here

Veronica Ramirez is a staff writer at NerdWallet, a personal finance website. Email: vramirez@nerdwallet.com. Twitter: @veraudrey.