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Realtors Speak: Advice for Buying San Francisco Real Estate

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There’s never been a better time to buy a home in San Francisco – even though prices have risen slightly from rock-bottom levels, loans are cheap and rent isn’t. Boasting a vibrant culture, a booming economy and breathtaking natural beauty, San Francisco’s many charms draw residents (including us nerds!) like a lodestone, and thankfully, Jon Sterling of ClimbSF is here to help first-time homebuyers navigate the crowded market.

What do first-time buyers in SF need to know?

If you’re renting now and living in a nice place, you may have to make some sacrifices when moving into a place you purchase.  That can be especially shocking if your monthly mortgage payment is higher than rental payment.  That is a common situation for people who live here, and even more common for people moving here from outside the Bay Area.

Also, the geography is street by street in San Francisco.  A few city blocks can make a huge difference in home values and quality of the housing inventory.  Spending some time figuring out which neighborhoods will serve your needs best is wise as well.  That includes doing “dry runs” of the commute during rush hour – public transit can be unreliable, traffic can be congested and biking can be perilous.

What are some good resources for those homebuyers?

The best resource for buyers is to find a great real estate agent that works the area where they want to buy.  Agents in San Francisco are geographically focused, so an agent working in Pacific Heights will probably not know much about SOMA condos, and vice versa.  Educating yourself by walking the neighborhoods that interest you is also a great way to learn what’s happening.  You’ll see and hear things when you’re on foot and mingling with neighbors that you won’t learn by driving through the area or limiting your education to general online articles.

What are the three most common misconceptions about buying a home in SF?

Cash is king. If you are writing an all-cash offer, you have an advantage in a multiple offer scenario.  Sellers who have quality properties often have several all-cash offers to choose from.  While an all-cash offer is stronger than an offer with a financing contingency, that doesn’t make it a slam-dunk.

Today’s market is the same as last year’s. Sales prices from six or more months ago are comparable to prices today.  The market changes daily and comparable units sold more than 2-3 months ago are largely irrelevant today.

Buying in San Francisco is like buying anywhere. The advice your parents and other friends give you about how to buy real estate applies in San Francisco.  Parents and friends mean well, but if they don’t live in San Francisco and pay close attention to the real estate market here, their advice is frequently inaccurate.  Real estate is a local business and the rules for buying real estate in this market are different that elsewhere.  Writing low-ball offers and trying to negotiate every little item is good advice in many markets, but not in the current San Francisco market.  There are simply too many qualified buyers for each well-priced listing, so sellers don’t have to negotiate.

Is there any advice you’d have for younger homebuyers in particular? 

Don’t spend every penny of your savings on a down payment.  Keep money in reserves for emergencies.  Also, don’t borrow the maximum amount the lender has approved you to borrow.  Just because you canspend that much, doesn’t mean it’s wise to do so.  This is your first home, not your final resting place, and it’s okay to start small.