The housing market remains red hot in San Francisco, and property values are estimated to continue increasing year over year. The median property value of homes in San Francisco is now over $1.1 million. This is great news for homeowners in San Francisco. However, if you are buying a first home in San Francisco, you should prepare because this is probably the biggest financial decision you will make in your lifetime. From determining your budget to analyzing the market value of a listing you love to why you need an experienced San Francisco real estate agent working on your behalf, here are five things that you should know before buying a home in San Francisco:

Work With an Experienced San Francisco Real Estate Agent

Over 90% of San Francisco’s home sales include a buyer’s agent. Why?

Realtors get a commission after selling a property, and this makes some buyers hesitant to use the assistance of an experienced real estate agent. Certain buyers believe that hiring a Realtor will increase the cost of the property. However, buyers should keep in mind that it is the seller who has to pay the commission and not the buyer. The cost of that commission is already built into the marketplace and if anyone will reap the benefit of a discount, it’s the seller not the buyer.

A knowledgeable, reputable San Francisco real estate agent will guide you and act as your fiduciary (which is the highest standard of care) and protect your interests throughout the buying process, from the price negotiation to planning for home inspections. The top SF real estate agents work by referral and word of mouth (see Yelp and Zillow) so doing right by their client is more important to their success than any individual commission.

“Not knowing very much about the SF Bay at all, the decision to by a house in San Francisco was daunting…In addition the great service, we were favorably impressed with the professionalism and expertise demonstrated throughout the process. Tanya and Danielle provided expert guidance at every step of the home buying process.”

Look Beyond the Paint

When buying a first home in San Francisco, you may find that your dream house has some features you would like to change. While fixing cosmetic issues in a house is inexpensive (a fresh coat of paint or refinishing floors, for example), major changes such as moving walls or gutting a kitchen or bathroom are more expensive. Focus on “good bones” because the skin can be improved. No, not with Botox!

Don’t give up on the house of your dreams just because it requires fixing up, but remember to factor in the costs of repair to determine whether you can afford to purchase the property. A seasoned San Francisco real estate agent will help you determine which kinds of fixes are cosmetic, and which will require a bigger long-term commitment in terms of both time and budget.

Consider All the Costs of San Francisco Home Ownership

The purchase price of the house is just one of the costs of owning a home. Remember to consider all the other expenses that are involved in your new home. These expenses can include homeowner association (HOA) fees, insurance, and real estate taxes for your San Francisco house which can quickly add up. Both home improvements and home maintenance are ongoing commitments that you can expect in order to protect your investment and maximize your return when, or if, you choose to sell.

When buying a home in San Francisco, ask questions about the upkeep but compare apples to apples. A lower-priced San Francisco condo in a less than pristine complex can be more expensive in the long run compared to a higher priced one that is well-maintained or brand-new.

Do Your San Francisco Research

There are numerous options available when buying a first home in San Francisco: location, style, amenities, condo vs house vs TIC, views, walkability, etc. While you may have thought through any of these options, there are most likely other factors you haven’t even thought to consider.

A good San Francisco real estate agent will help you discover what’s most important about a home to you. They know the city extremely well and understand what the various neighborhoods offer and can help you choose a home that best suits your needs. Oftentimes, the kind of house and location we think we want at first are not necessarily the ones that truly best suit us.

Get Your Finances Organized Well in Advance

One of your absolute first steps will be to accurately determine your budget through loan pre-approval (and no, not online). Your real estate agent can make recommendations for the best local mortgage brokers and help you through the process. Understanding the true cost of ownership will empower you and make sure you’re shopping for homes that fit what you can afford.

It is also wise to determine your housing budget for the next few years. How soon will you be able to make desired home repairs and improvements? How much will the move cost? Are you prepared to cover HOA fees, property tax fees, and other fees that come with owning a home in San Francisco? Do you understand your tax breaks for owning a home? (Note: they are significant and extremely helpful for most professionals.)

Buying a First Home in San Francisco

“Buying a house is no easy task in San Francisco (especially as first time homebuyers!) and once my husband and I were ready to take on the challenge, we knew that working with the right real estate agents would be a big part of our success. We can proudly say that in less than 2 months after the first weekend of working together we have the keys to our new home!”

Are you thinking of buying a home in San Francisco? The Danielle Lazier :: SFhotlist Team and Compass San Francisco has the experience to successfully guide you through the process. Reach out for a free consultation and see how we can help!

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